First, on the issue of pardon and clemency, my reading of the link provided indicates that the President can circumvent the process and pardon or grant clemency without adhereing to established guidlines if he wants.
Given these virtues, why not take advantage of such a process in all cases? The obvious answer is that the Constitution vests the decision to grant a pardon in the President, with no requirement of advice or consent from any person or office. As former counsel to the President Beth Nolan recently explained to a congressional panel, "The President's the President." The President also is the commander-in-chief of the armed forces, but we would not expect a President to make major military decisions without the input of the Department of Defense. So, again, why not? Historically, the reason cited why the "official" process was bypassed on rare occasion was that the matter under consideration was of such a well-known and notorious character that the competing considerations were obvious. Occupying this category are the 1974 pardon of Richard Nixon and the 1992 pardons of Caspar Weinberger and others
So in terms of raw power, my interpretation is the President can do it. The restraints are political and political costs in this would be weighed next to other competing considerations, such as the likelihood of Libby being flipped by the Prosecutor or who could be called as a witness and placed under oath.
Next, s9 lays out I think reasonably accurately the narrative preferred by the White House. We can see that narrative in the echo chamber. What I am arguing is that this particular case has provided resistant to that narrative.
First, Fitzgerald narrowed the indictment down to lying, and this has defeated wide ranging discovery motions that are intended to feed that narrative. Instead Fitzgerald has been able to fend them off while dropping information that undermines the White House line. The newscycle gets away from the White House on Plame every time he does this, and the Niger Memo keeps popping up in news stories as reporters provide background. That is not part of the official narrative. A few of these little grenades made A1 at the Times with off White House point headlines. Some information pried out of Fitz has gone the other way, but that well has been very shallow and the stories few. I can think of only two offhand and I obsess over this story ( YOU think?)
Also, the greymail strategy is defunct now that Judge Walton has basically resoved the issue in favor of the prosecutions recommendation. That, for now at least, has deprived the White House of being able to simply stonewall discovery requests and suffocate the prosecutions case.
And lets not dismiss too quickly the likelihood of Cheney being drawn into the Libby trial. Fitztgeralds filings hint very strongly about the role of Cheney and possibility of him as a witness. Again, even the fight against a subpoeana transforms the narrative from the White House line
Next, in terms of labeling the prosecutor as a liberal traitorous Javert, I see no evidence beyond freeperville and the right wing media of that working on Fitzgerald. So far, the regular media outlets, who have readily adopted the Gore/Kerry/Clinton narratives so readily handed down by the Mighty Wurlitzer have not run similair stories. But more importantly, you have not seen anything near the usual ferocity and intensity from the Wurlitzer on this that you would see on anything else of this maganitude. They are counterpunching, not charging the barricades like they normally do. The White House and their media outlets respond quickly, but don't hammer the story. My read of that is they want to keep it off the radar as much as possible.
My premise is that this sitution is too close to the bone for them to want to make it the focus of a frontal counterattack effort. Instead, it will likely provoke something uglier and further afield. If I'm Karl Rove , I do not want the midterms or the 08 election to be about Niger memos, lying to proseuctors or failure to find WMD in Iraq. I want it to be about the other guy and why he sucks. Every Plame revealation is a story that is NOT about Gay marriage, or taxes or immigration or whatever else works for them. AT best, they might prevent some damage with their usual methods, but this certainly isn't the game plan.
Ultimately, if it turns out Fitzgerald has evidence of a larger conspiracy, I think executive action to end it becomes viable. Waiting to the end of the term could have more than just libby on the chopping block.