Or there are tons of folks in the Bush states that self-identify as Democrats (in the mold of FDR, Truman, JFK etc.) but can't bring themselves to vote for the French contingent of the Democrat Party (Kerry, Dean, etc.). As these self-identifications continue to change, look for GOP candidates to pick up more and more offices in state legislative and local elections.
Republicans are already winning two-to-one landslides in states like Oklahoma, where Democrats have a significant registration advantage. However, on the local level, there is no sign of state legislative elections going over due to the "French contingent." Why do you believe that this will hurt moderate, local Democratic parties, when it hasn't really yet?