Put a different way...if Liberal (in the actual, modern sense - any other definition is irrelevant) and Libertarian are so very similar, as you state - why don't Ron and Rand throw their hats into the Democratic primary and try to change that party from within? Why do they seem to think making that shift from within the Republican party is an easier job?
I for one would love to see Libertarians making the case for free markets during a Democratic Primary debate. But the fact is, not only would they get laughed off the stage - they would never be allowed anywhere near that stage.
In fact, if you went to an Occupy protest carrying a Libertarian sign, extolling the virtues of small government and free markets, you would be lucky if they didn't call _you_ the "oppressor."
I'm not going to get into this stupid, adolescent discussion about lines, spectrums, circles, ideological matrices and graphs. I'm just trying to get you to see that Libertarianism not only has very little in common with actual Liberalism (that is, modern Liberalism, not this historical abstraction you speak of), but is in fact completely opposed to it. There's no shared DNA there. None. Not even a little. The Democrat party makes _no_ room for Libertarian ideals in its platforms. Not a little. Not some. NONE. Zero. No similarity.
Ron and Rand are conservative republicans, and not libertarians. That's exactly why they are members of the republican party... If you want an actual libertarian, look at Gary Johnson. In case you forgot, the republican party openly attacks any libertarian ideology. It just so happens that some of the conservative voter base will naturally favor a few libertarian principles. Democrats will side with libertarians on social issues, generally, while republicans will side with libertarians on economic issues. It's just the nature of things.
All the parties have one piece of the pie, but refuse to see past the nose on their face to receive the entire pie. My guess is that it comes down from the politicians who have been lobbied into cognitive dissonance, trying to CYA with their voter base. Then in turn, their voter base starts spewing baseless garbage to support their politician's lobbied stances. Those of us that sit on the sidelines(Independents) scratch our head as we see absolutely ridiculous statements being sold off for votes with people seemingly eating it up. Meanwhile the nation is divided nearly to the point of civil war, between 2 factions entirely obsessed with their football issues and disregard for the law.
I question what's wrong with the constitution? What's wrong with the bill of rights? Why do these need to be political issues? And when something falls outside of that, did you happen to forget the 9th amendment? Both parties have a long list of inexcusable violations against these documents, to the point of trying to define a difference being like trying to excuse excuse one murderer while sentencing the other to death.