Libertarian-Left Electoral Alliance Version 2.0
Best of all, though, is #3:
3. Don't be a slave to the bureaucracy. Look, I don't expect you to turn into a libertarian. But there are ways to achieve progressive goals without expanding the federal government, and if you're willing to entertain enough of those ideas, you'll be more appealing than a "free-market" president who makes LBJ look thrifty. You could talk about the harm done by agriculture subsidies, by occupational licensing, by eminent domain, by the insane tangle of patent law. And no, I don't expect you to call for abolishing the welfare state -- but maybe you'd like to replace those top-heavy bureacracies with a negative income tax?
Hell, just change "negative income tax" to "citizen's dividend," and the guy could call himself a Geolibertarian. I still don't find the Georgist arguments for taxing site value to be all that convincing, at least as an end-state policy. But if you're gonna do it, it's better to just evenly distribute the revenue and then let people use the money to contract services on the free market, rather than use it to fund government-provided services.
Of course, all this immediately cuts out the corporate center of the party, and its authoritarian nanny statists--the Hillary/Lieberman/Feinstein wing; but you never know what interesting mix of ideas will come out of people like Dean, Feingold, or Jerry Brown.
At any rate, simply adopting a "libertarian lite" approach like Plank No. 3 would probably be enough to put a Democratic candidate ahead of most Republicans when it comes to free market practice. The common libertarian impression that Republicans are friendlier than Democrats to free markets, despite their massive promotion of corporate mercantilism, comes mainly from the fact that their brand identity comes from talking so much about "free markets." But that means about as much as the other side's "Democrats care" branding.