The question remains to be seen is if there are enough disenfranchised Democrat voters to put it over the edge. Like stated in the OP he appeals to a certain amount of Dems just with his stance on war alone. That might make the difference.
Almost every democrat I've talked to feels duped by Obama and many of them said they would probably vote for RP if he was in the election. RP definitely has the most independent/democrat appeal of any of the candidates.
I spent all day today working at a Ron Paul booth at a gun show. Several Democrats approached me and told me that they'd be switching over to Republican - this time only - in order to support Ron Paul. The head of our Ron Paul activist group is a former liberal Democrat who woke up to Ron Paul in 2008.
Ron Paul converts people like no other. But they aren't going to jump parties to support another neoconservative Republican like Bush or McCain.