Speaking as an ex-Libertarian here. . . .
Simply put, the LP asylum has been taken over by the inmates. Libertarian ideals are often popular, but the party itself is run by complete fruitcakes. People who are totally inexperienced but who want power, people who are completely incompetent but want power, people who are single-issue nutcases but who want power. Then there are the drugged-out hippies who only joined because the LP is pro-legalization, who contribute nothing useful and who hate every ideal of the LP except for drug legalization.
I watched the LP sabotage itself internally for over a decade, and gave up in disgust after September 11th, when pretty much the whole LP -- at least everyone whom I knew -- went into blame-America-first mode like something out of a Nader rally. I heard comments about how "all the hijackers died in the attacks, so why are we invading Afghanistan?" -- and that's a nearly direct quote, not a hypothetical example.
In my opinion the LP is beyond reform, and beyond hope of viability. I have been pro-Bush in this election, but I am not a Republican, and I doubt I ever will be one; the whole religious-wacko orientation creeps me out, not to mention the anti-freedom stances on so many issues and the sellouts of gun rights whenever they find it convenient to do so. But I can't in good conscience support the fruitcakes of the LP, so I am "politically homeless" once again.