I agree with much of what Jeff says on where the Liberals can go on this coalition question. On a slightly complimentary track, I would argue that this coalition debate is now morphing into a possible advantage for the Liberals, if played properly.
The Conservatives have an advantage on the economy. Notwithstanding recent events, the simple fact of a relatively strong economy internationally, evidence of a rebound, are inherent strengths for the government. If we plan to take the government head on, with the economy as central backdrop, we have a chance, but the odds are long and that's just fact. What the Liberals really require is another issue to take hold during a campaign, fight on terrain that is more risky for the government. Conventional wisdom, using the 2008 coalition debacle as backdrop, assumes that the government would love the opportunity to revisit all those attack lines during a campaign. I agree with that assumption less and less, in fact I think if we get aggressive, we can turn this issue around and in so doing, hit the Conservatives soft underbelly.
If you review the Conservatives chief liabilities, it always revolves around this idea of a mean spirited, divisive, partisan entity, that generally doesn't play well with others. This narrative is the LAST thing the Conservatives would choose as a dominant election theme. However, if the Liberals use this coalition question, arrangements, whatever, and turn it into a discussion that Harper is the problem, Harper is an OBSTACLE to the good government all Canadians crave. I don't claim to understand the entire mood of the country, but I'm as certain as can be, that if a politician can paint himself as a "unifer", that will bring us out of this petty partisan deadlock, he/she will find resonation, in a powerful way. I'll take it a step further, this discussion could be the spark that breaks the electorate malaise.
People hate the way Ottawa operates. Nobody pays attention, and the apathy grows every year. Given voter hostility to politics in general, pretty rich that Harper actually tries to argue he deserves a big mandate, when almost near universal opinion agrees he has resided over the most dysfunctional Parliament in our history. How many times have you heard a seasoned Ottawa observer say they've never seen it so bad, we've reached new lows in terms of discourse, respect, etc. The Conservatives can resist all they want, but a certain fundamental truth, "the buck stops there". The Conservatives set the tone, their the government, this clusterfuck is essentially their baby. It is the job of the Liberals to make this self-evident truth STICK like a panhandle tar ball. You don't reward Harper, you turf him!
You're the problem Mr. Harper, and we're willing to move past this current embarrassment, work with other parties, with the common good in mind. I picture a debate, wherein Ignatieff delivers the piercing line, in confident fashion, "we'll even work with the Conservatives, after your gone".
Rather than fear the "arrangements" discussion, let's embrace it, because when looking at options, it might just turn out to be a preferred narrative.