Yep, I think the Republicans are going to have to abandon the its out of touch social issues: abortion, hating gays, hating minorities, they should keep gun rights though, and then just preach fiscal responsibility, conservatism and smaller government.
The problem with the republicans on the fiscal responsibility, conservatism and smaller government front (their strong point) is that they seem unwilling to cut any type of defense and military spending. It just makes them look hypocritical.
The U.S. could emerge as a one party state which would be scary and interesting to say the least. It would prove undoubtedly that the system of democratic process in the country- special interest groups, the press, lobbying ect.are fundamentally broken.