Middle Cheese, my in-the-know Republican source from the good old days of Campaign 2004, now affiliated with the Romney campaign, offers the take on the state of play in Iowa, from within Team Mitt:

In the past four Iowa GOP Presidential caucus contests, the eventual winner garnered an average of 34 percent of the caucus voters, while second place garnered an average of 27 percent. Another factor to important factor to consider: Because of the current apathy running through the Republican Party, this Iowa caucus is likely to post one the lowest attendance figures in decades. A just-released Iowa State University poll of likely caucus goers shows Romney and Huckabee in a virtual dead heat (25 percent vs. 22 percent, respectively), with Giuliani running third at 16 percent. So what accounts for Governor Huckabee’s surge in this and other Iowa polls? One of the major contributing factors has been the collapse of Fred Thompson’s support, most of which are Christian conservatives who went to Huckabee. Not too long ago, Fred had the support of 15-16 percent of Iowa caucus goers; he’s now dropped to 8-9 percent. So Huckabee’s 22 percent reflects a core base constituency of hard-right evangelical Christians. The big question is this: Does Huckabee have the ability to appeal beyond his base and get the 32-34 percent or so of caucus goers he needs to win Iowa? I think it’s an open question.

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What does this mean for the other campaigns and their strategies going forward? I’m guessing that Thompson’s campaign recognizes the hemorrhaging support for their candidate, and will go big time negative on Huckabee to stop the bleeding… Look for Team Romney to aggressively educate Iowans about Huckabee’s big government record of spending and taxing more than Governor Bill Clinton did. Team Rudy is aiming for a strong third place finish in Iowa, and is covertly cheerleading for Huckabee to knock off Romney. McCain is putting all of his remaining eggs in the New Hampshire basket for one last stand.
Because of the likelihood of low attendance this time around, a premium will be put on a campaign’s ground organization to get out the vote. On this score, Romney’s Iowa team is probably stronger than any other GOP campaign.
Finally, some of the other campaigns are spinning that Romney’s decision to give a religion speech this week is a direct response to Huckabee’s recent surge. This makes for an interesting theory, but it’s simply not true. The idea of doing such a speech has been in the works for months. If anything, the recent push-polling in Iowa attacking Romney’s Mormonism had more to do with the timing of the speech than Huckabee’s rise in the polls.
Because of his liberal positions on taxes and immigration, I am skeptical that Governor Huckabee can broaden his appeal among Iowa Republicans. Romney’s challenge will be to deepen his support in Iowa. Thompson has got to stop the free-fall.