They seem to have two factions: one is mostly in hock to public sector unions, a group with a real opportunity to retake power in the Labour Party and the Orange Book faction which is very much at home with the Conservatives.
LibDems have never sat comfortably on the left-right axis, because that isn't what makes you a LibDem. The left-right axis in the UK is about economic issues - that's the defining feature of whether you are Labour or Conservative. But the defining feature of being a LibDem is a passion for civil liberties. Admittedly, that would keep the Huhnites out of the Brown-Straw Labour Party, but it is no reason to keep the Cleggites out of the Cameron-Davies-Letwin Conservatives.