Obama continues to lose ground in the polls
There are several possibilities here. The most favorable is that Obama campaign is actively trying to tamp down expectations and avoid peaking too early. In this scenario, the campaign decided to fight the "Obama fatigue" and the concern about backlash against a "coronation" by keeping Obama out of sight for a week and generally keeping things low key until the convention, then counting on a massive surge and face to face debates to make up for any lost ground.
The least favorable is that the Obama campaign is simply not good on a long slog. It is finding it difficult to find a message that will stick, and the economic crisis has stabilized to a point where people revert to their traditional voting patterns.
There are a wide variety of additional factors to consider, including the resentment by Clinton supporters stoked by the coverage of the convention wrangling and the VP fight. And it is unclear how the get out the vote effort will impact things.
The Obama campaign proved fairly resilient last time in the face of similar criticism that it could not "close the deal" against Clinton, but won by playing to the rule and focusing their resources where they needed to in order to win. This was, of course, a great frustration to the Clinton camp, since Clinton kept winning victories that ultimately didn't matter because Obama was able to win enough delegates overall.
I will confess that my vague sense of political climate is starting to pick up a severe muddle. The tremendous energy that pushed the Obama campaign feels dissipated to some degree. To some extent, I think that reflects disillusionment over a number of things such as the FISA vote and the difficulty merging Obama's campaign with the more established Democratic campaign machine (including integrating a fair number of Clintonistas). But the Obama campaign has weathered such challenges in the past. Where Obama's resources will -- I think -- make an unprecedented difference will be in actually getting voters to the polls -- a factor that simply cannot be assessed until election day.
At a minimum, however, it will be important for Obama to project leadership and strength at the Convention. Given the media's fondness for fanning the Clinton feud, we can expect fairly negative MSM coverage on the form of constant questioning (the trend in the last few weeks of coverage, according to PEW) and continued fawning over McCain. That's difficult to overcome, even with an audience that has by and large grown distrustful of the media.