LOS ANGELES -- Last Sunday, a well-placed California Democrat candidly laid out to me the situation here. Democratic Gov. Gray Davis has run a horrible campaign against his recall. The effort by Lt. Gov. Cruz Bustamante, the only prominent Democrat on the replacement ballot, has been even worse. Consequently, another Republican actor might soon occupy the governor's chair in Sacramento, marking the first major Democratic defeat in this state since 1994.

But then this Democrat ended our long conversation with a startling prophecy, indicating that help was on the way. He predicted an all-Democrat three-judge federal appellate panel in San Francisco, including two of Bill Clinton's liberal appointees, would postpone until next March the Oct. 7 recall election as demanded by the American Civil Liberties Union. What's more, he said, the decision would be based on the Supreme Court's 2000 decision in Bush vs. Gore.

How did he know all this? It was common knowledge in Democratic lawyers' circles, he explained.

My source's prophecy became reality within less than 24 hours, including the detail of citing the 2000 election decision. So much for the myth of judicial objectivity. The notoriously liberal 9th Circuit of Court of Appeals had struck to terminate the terminator. Arnold Schwarzenegger had been on a roll, climaxed by an impressive performance at the state Republican Convention in Los Angeles last weekend. Unless the panel is reversed, the Republican momentum will be dissipated by a six-month campaign, giving Democrats a fresh start.

The Republican establishment has gotten behind the Hollywood actor and former Mr. Universe in a way that seemed inconceivable when I made my last reporting trip to California several weeks ago. At the state convention, conservatives chose to ignore Schwarzenegger's social liberalism and embraced him as a disciple of Milton Friedman's economic conservatism. "I'm a Republican because Milton Friedman is right and Karl Marx is wrong," he told cheering delegates. They were moved by his story of how he commissioned the bust of Ronald Reagan for the Reagan Library.

The convention's mood favored conservative State Sen. Tom McClintock getting out of the race to stop dividing the Republican vote in this overwhelmingly Democratic state. At a meeting of the party's county chairmen, just two of them dissented from agreeing that there should only be one Republican candidate. Former Gov. Pete Wilson's organization was lining up support for Schwarzenegger, but his backing was more spontaneous than that. Young men and women with "Arnold" stickers roamed the LAX-Marriott Hotel.

Financier Gerald Parsky, George W. Bush's main man in California, wore neither a Schwarzenegger nor a McClintock sticker and talked only about the president's 2004 campaign in his speech to the convention. It is no secret that Parsky has not been enthusiastic about either the Davis recall or the prospect of replacing him with a Republican. In contrast, there is a strong sentiment among Republican leaders that Schwarzenegger has a much better chance than Bush of carrying California, with enough money on hand to get out the vote.

Schwarzenegger's nightly tracking at the end of last week showed him defeating Bustamante by a comfortable margin, even with McClintock still running. The same polling showed a huge margin in favor of Davis' recall.

That reflects the intense unpopularity of Gray Davis' call for higher taxes after his relatively narrow 2002 re-election. For all the help from Bill Clinton, Jesse Jackson and John Kerry, veteran Democratic politicians told me that they did not see how the governor could survive Oct. 7. His reversal of previous opposition to driver's licenses for illegal aliens is considered within his own party to be a horrendous blunder.

Since the fiasco of taking $2 million from Indian gambling interests, Bustamante's negatives now hover around a poisonous 50 percent. Hardly the standard bearer that the Democratic Party wants, he is a professional politician who accidentally moved up the chairs to Assembly speaker, lieutenant governor and now de facto nominee for governor.

It is also accidental that the recall scenario pumped new life into a California Republican Party previously thought to be comatose. New voter registration, for the time being, is running four-to-one Republican. It has taken three Democratic judges to slow down the revival.