Democrats get into trouble when they violate the 11th commandment -- Thou shalt not fail the base.
Deeds ran against the base in many ways in VA, citing problems with DC Democratic policy. Naturally, the Democratic base wasn't thrilled and stayed home. Those who showed up at the polls in VA supported McCain by 51% in the '08 election and since Obama won by 53% in VA there had been a huge fall off in the Democratic vote.
Meanwhile, Corzine (Gov. - Goldman Sachs) entered the race with a job approval in the low 30's. The fact that it was as close as it was, given his many handicaps, is something of a huge surprise.
As for the Independents turning against the Dems, given that Republican self-identifiers are at a record low, what do these former GOPers call themselves? Independents, perhaps?
As for Obama's approval rating making the difference, that argument doesn't hold much water -- his numbers are down only a point or two in NJ and VA from his numbers in the '08 election.
All this election showed is that the base matters -- for both parties. The GOPers were pissed off and motivated. The Dems were either complacent or frustrated by the inertia to get the job done. If 'moderate' Dems take away the lesson that they should do less, then they are going to get wiped out in a 100-seat loss in the House. Their only hope of re-election in '10 is to give the Dem base a reason to support them enthusiatically. Otherwise they have to pray the GOp continues its act of self-immolation as they did in NY-23, which hadn't elected a Dem since Ulysses S Grant!