Mitt Romney, seeing disaster unfolding in South Carolina, spent much of the past week trying to mitigate the damage by pretending he cared more about the Nevada caucus than the SC primary. Don't buy it.
Romney has been working on winning South Carolina since at least August, 2004, when he opened a state political action committee there (Commonwealth PAC South Carolina). It's been a critical part of his campaign strategy all along, and even moreso once he decided to veer rightward toward the opening for a "conservative alternative" to frontrunners McCain and Giuliani. The right-wing opening is primarily in the southern states.
He fought to win county straw polls. He fought for endorsements. He began advertising in SC around Labor Day, and ran as many ads there as every other candidate combined. He spent lots and lots of time and money in that state. And he lost it badly.
The good news for Romney is that Fred Thompson is done -- whether he officially drops out or not, he has no money and no interest and will no longer be a factor.
Romney certainly still has a path to victory. [Note: a possible path; I still predict, as I have all along, that McCain will be the nominee.] Always bear this in mind: In a war of attrition, the guy with a quarter-billion dollars in his pocket has a distinct advantage.
Nevertheless, this is a very bad day for Romney, despite what he might say.