First, Republicans really need to take control of their "brand". People in blue states truly believe they just want to protect the rich. Republicans need to go into urban areas and do some evangelizing.
Second, Conservatives and Libertarians need to form a coalition. Why? Because we got to restore the Constitution and fiscal sanity. And Conservatives aren't going to win in deep blue states like New York and California. It's not "noble" to keep losing elections.
In fact, the Tea Party should support small government Libertarians willing to run as Democrats in blue states. Because low info voters only care about the "D" or "R" behind a candidate's name. So, we need a coalition to work across both parties.