Solution: Let's go back to our roots, and make economic populism the party's national common denominator. (I mean things like strong job protection, progressive taxation, labor rights, market regulation, a social safety net, and universal health care.) This will allow Red State Dems to win, by freeing them from locally unpopular social positions, and allow Blue State Dems to continue to advocate for the liberal social policies they feel strongly about.
Socially and culturally, I think we should simply get broader. By removing abortion, guns, and gay issues from the party's national platform, we build a broader coalition that will win national elections. Progressives who feel passionately about social issues can continue to push them -- they won't be excluded from the party. But the primary focus for activism on those issues can shift to outside groups.
In essence, I'm talking about a state-by-state approach to social issues, but a national approach to economic issues. Many Kossacks have accepted Howard Dean's argument that gun control should be left to states, and many have also embraced the candidacy of the socially conservative Stephanie Herseth, who is culturally in step with her state (South Dakota) but still party of the national party.
I'm suggesting that we can conquer the red states, if we are willing to pitch a bigger tent. We should embrace those with social positions like Stephanie Herseth, and gun control positions like Howard Dean. It's the only way to build a national electoral majority.
See also my longer, more detailed diary entry about this strategy.
ADDENDUM: I just want to quote the last couple paragraphs of my previous diary entry here, for liberal Dems who are uneasy with what I'm suggesting:
We can do the same in reverse. Rather than fighting unwinnable cultural wars across the country, let's get people focused on pocketbook issues. As they start to see how the Republican Party is cheating them economically, they will slowly shift their partisan allegiances. In time, many will be open to more progressive social ideas as well.