I'm not even sure how Bolling has any shot at the nomination now and I wouldn't be surprised if he gave up.On Wednesday, bowing to the inevitable, Bolling did indeed drop out of the race. I don't even think he could have won an ordinary primary, but a convention was definitely a bridge too far—something he himself recognized in saying that party regulars had put up "too many obstacles for us to overcome" by deliberately choosing the convention route.
Now there's a question as to whether Bolling will seek reelection as LG, something he has yet to address publicly. While Virginia has the strictest-in-the-nation term limits for its governors, there are no limits whatsoever on the number two spot. However, a whole ton of other Republicans have already declared their plans to run for lite gov, though, and guess what? That nod, as with the gubernatorial slot, will also get decided via convention. So it's possible Bolling could even get squeezed out of renomination to his own job. Double ouch.
As for the governor's race, I'm going to say that this move is not a major positive for Democrats, and if anything might be a negative. Bolling tended to slightly out-perform Cuccinelli in hypothetical head-to-head matchups with Democrats, and the Cooch definitely has worse favorability ratings with left-leaning voters, so there's little doubt Democrats would prefer to face him in the general. But that was already extremely likely—as I say, it's why Bolling dropped out.
Still, though, a nomination fight would have pushed the already mega-wingnutty Cuccinelli even further to the right, whereas now he can try to moderate himself a bit. That said, Cuccinelli is a true believer and probably is intellectually disinclined to changing his profile—and in any event, it's not like he doesn't already have a long track record of extreme statements and actions that can be used against him. So for all this sturm und drang, I expect Bolling's departure to change little.
P.S. There's also a little bit of news on the Democratic side, where "sources close to" ex-Rep. Tom Perriello, a favorite of many progressives, tell the Huffington Post that he's considering a run for governor. That would set him up (in a normal primary—Democrats don't do the convention thing) against 2009 candidate and former DNC chief Terry McAuliffe.