Here’s an excerpt from Part 2 of the behind the scenes Newsweek piece on why McCain stayed in the race after his disastrous start:

By summer, McCain had less cash on hand than Ron Paul, the libertarian cult candidate. At a broiling-hot campaign retreat at McCain’s family compound in Sedona, Ariz., the candidate stood glumly at his grill, handing out smoky chunks of meat, not saying much. For the weekend after July 4, McCain and his best Senate pal, Lindsey Graham, went to Iraq together. McCain had been under pressure from various party elders and some of his own aides to back off his steadfast support of the war in Iraq. But he was moved by the stoicism of the troops he met there, and also stirred by a pep talk he got from Graham, a smooth talker and true believer in the McCain mystique. Somewhere on the 14-hour plane ride back, McCain said to Graham, “You know we got to keep going; we can’t let those guys down.” Graham replied, “That’s right, John. If they can do it, we can do it.”

And here’s a good excerpt on the Times lobbyist hit piece:

Schmidt was not so sure. He regarded himself as a realist about the media: he was willing to use reporters and even be used by them. He regarded the media as a problem needing vigilant attention. Even the friendliest reporters, the ones whose company he enjoyed at hotel bars, could be expected to turn on the campaign. The New York Times, he believed, harbored a clear liberal bias. “Look,” he told Salter, “if McCain is the nominee, he’s going to have two opponents: whomever the Democrats nominate and The New York Times. And The New York Times is gonna spend every day trying to help your Democratic opponent beat you, and you’ve just got to accept that.”
On Feb. 21, the Times posted a story on its Web site implying that McCain had been romantically involved with Iseman around the time of his bid for the 2000 nomination. The campaign was given two hours’ warning. McCain was campaigning in Ohio, and Salter and Schmidt were in Washington. They raced to the airport, where it was snowing and flights were being canceled. Finally boarding a flight to Detroit, where they could rent a car and drive to Toledo, they scrolled their BlackBerrys as the Times story popped up online. Schmidt began to gently pound his fist on the seat in front of him.
“This was a mistake for The New York Times. This is not only not gonna hurt us, it’s gonna help us,” Schmidt said, with just a hint of excitement in his voice. “We’re gonna go brief McCain. We’re gonna tell him to stand up there stoically. Do a press conference. Take every question. Just don’t get pissed off.” Salter began to feel a little better. The two men discussed damage control. When they got to Detroit, they were going to start calling reporters, telling them that the story wasn’t fit to print, that it had been spiked a couple of times before the Times finally ran a very thin version—a clumsy attempt to slip hints of illicit romance into a story that purported to be largely about McCain’s ties to lobbyists. This was just another sad chapter in the paper’s once proud history, they would say—a tawdry sequel to Jayson Blair, the Times reporter who got caught fictionalizing his stories.