Vermont isn't just more Democratic than it's ever been, it's more liberal. There's a sizable "Take Back Vermont" movement, and if you talk to older Vermonters (keep in mind even in the biggest Democratic landslides, you have about 40% supporting the Republican), you'll notice they're not as pleased with the trend of the '70s, '80s and '90s, which saw liberal New Yorkers (Howard Dean, anyone?) and folks escaping Taxachusetts and Connecticut to go to the scenic and rather "undisturbed" Vermont. There have also been quite a few VT Republicans and former Republicans who have been turned off by social conservatives gaining more influence in the GOP. Combine those two things and you get a Democratic VT.
So, you'd need BOTH of these to happen to get VT back in the Republican column:
1) The GOP to become significantly more moderate on cultural and social issues.
2) An influx of more conservative voters and/or more liberal voters moving away.
Here's what I don't get...if it's really demographic changes during that time that caused VT to go Dem, how did Johnson not only win it in '64, but win it by a bigger margin than his national one?
I think demographic changes played some role, but something else happened.