I agree with you that the mid-terms will be based largely on domestic matters. I fear, however, that the Republican Party will not consider its foreign policy follies soon enough, if at all, to get itself back on track by 2012.
I would also like to claify my comment in light of your remark: "There has certainly been and always will be a difference in opinions on whether we as a nation have a duty to spread democracy or whether our example should be the limit."
That isn't really the disagreement here. Recognizing the anti-Conservative nature of Bush foreign policy is not the same thing as isolationism.
It has long been accepted by Conservatives that private property, not democracy, is the root of freedom. Until there are land property rights in the Arab world, elections will not be helpful. It is also going to take several decades for such institutions to grow under the best of circumstances. I share your aversion to Saddam Hussein, but the timeline for constitutional development is much longer than his life span. A secular Iraq, as opposed to the theocracy in place now was more favorable to such development.
There needs to be a clear distinction between spreading constitutional development as opposed to spreading democracy. The United States should do all that it can to spread constitutional development. Spreading constitutional development lays the groundwork for constitutional democracy. The United States, for example, evolved from a Constitutional Monarchy into a constitutional democracy. Japan copied the European land code and other European institutions during an event known as the Meiji restoration in the 1860s, well before we arrived on the scene in the 1940s to introduce further democratic reforms. Had Japan not done so, holding elections there in the 1940s would not have made sense.
There simply are no instances of democracies evolving into constitutional democracies. Elections are extremely destabilizing. The stability needed for true land reform and private property rights is not achieved when you keep having elections.
And this doesn’t even begin to address the fact that places like post-war Japan and Germany were already nation-states formed over a period of several hundred years.
In short, the Republican Party has a foreign policy disaster on its hands. That recognition appears to be gaining some traction -- at least outside the current Republican Party establishment.