I've been watching and waiting for this one. Here's some WSJ-online interview material, and the folks talking generally seem to have it nailed: the President's approval ratings are in the toilet, and Congress' is getting even worse, because the fiscal conservatives (aka, the "small-l" libertarians) are in open revolt.
If the Reagan Coalition cracks up and lets the leftists across the aisle take over Congress, that's bad. But would gridlock necessarily be so? I don't know -- with legislation repeatedly crossing party lines, and Kennedy involved in the process, one can make the argument that there wouldn't be an appreciable difference. If Feingold wants to move to impeach: let him. We need the Dems to go away until they can discover an actual set of principles anyway.
Frankly, if the Libertarian Party can lose some of its shrill rhetoric, with the explosion of domestic spending under this administration, there's never been such a good time to paint themselves as an alternative to the Republicrats. With only the tiniest of exceptions, it certainly hasn't been Congressmen leading the anti-earmark charges. But the LP isn't going to do that because of the war, and because right now you can't be an LP candidate if you're a libertarian hawk like yours truly (not neocon, not isolationist, but "speak softly while hefting a pile of sledgehammers").
It's going to be interesting: much of the crackup has happened because the voters hold power in their hands that has never been held before. This isn't merely blogosphere triumphalism -- when's the last time any Congresscritter was so frustrated with the public casting a magnifying glass over pork that they'd lash out the way Trent Lott did last week? If the social conservatives stay on board b/c of the new Supremes, and the fiscal conservatives are willing to jump ship...then the Coalition is dead. What'll replace it?