"But the path back to power for California Republicans is right in front of their noses..."

I really don't think steroids will help that much, at least in statewide races.

Arnold got elected despite the (R) by his name.  If I recall (no pun) correctly, Arnold was first elected on the same ballot recalling Gray Davis.  If he hadn't, there's just no way he would have won the Republican primary.  Davis himself was first got elected at least in part because he ran attack ads during a Repub primary, suggesting that Dick Riorden (nonpartisan but Republican Mayor of LA) was insufficiently pro-life.  Tailgunner Bob can't hold his seat and Riorden can't win Bakersfield.  That Arnold rather than Riorden is Governor is a symptom of what is wrong with the California Rs.

As aculimic pointed out, Arnold got in on the recall election, in which there was no organized opposition from Democrats (since the official party line was to vote NOT to recall Davis). He then put himself in hot water after a year or two in office when he tried to govern like a right-winger. But he tacked back to the middle after getting stung by the voters with his initiatives, and he seems to be fairly popular as a moderate, fairly centrist governor.

And what is wrong with them is that they are extremist ideologues and out of touch with the majority of California voters. As a Democrat (but ex-Californian), I don't mind at all if the Republican party prefers to froth at the mouth rather than take the steps they would need to take to come back to the middle and possibly govern. But I think it probably would be better for the state in the long run if they did. California has a lot of problems, and although some are structural (initiative madness, etc), some need to be solved by the Legislature and that is not likely given the present partisan dynamic.

Of course if James Madison et al had not headed him off 200 years ago the right under their nose guy would be on the way to the white house right now.