It is becoming even clearer to me since the last election, as some of the clutter has been swept away. Conservatism has to mean resistance to expansive government power if it is to endure as anything vaguely coherent as a governing philosophy. Believing in limited government does not mean loathing all government; in fact, it means making a smaller government more effective, in part by limiting its ambitions to what it can effectively do that no other body can. The resilience of the anti-government thread – even in its least articulate "tea-partying" variety – and the cogency of this critique in the long-term of Obama's pragmatic liberalism make a small government Republicanism hard to kill, however much some would like it.
The problem, however, for such a limited government conservatism, is foreign policy. It is extremely hard to fit a multi-continent, Iraq and Afghanistan-occupying war on terror into this rubric. It's just too utopian, expensive and open-ended. Gary Becker makes this point well:
If you cannot cut taxes, and you will not make a dent on entitlements, then the next big ticket item is defense. My view is that a successful future Republicanism will begin to urge a dismantling of the empire and a limiting of the war on terror just as it will do in the war on drugs. This doesn't mean isolationism; it means a much more sober view of what a bankrupt America can do effectively to advance its real interests in the world: