This gets back to the issue of "Constitutional hardball" -- efforts to exploit loopholes or ambiguities in the rules of the game in order to win short-term partisan gains. Constitutional hardball has simply become the norm for Republicans these days. Sometimes it's relatively harmless, such as the recall election of Gray Davis in California. But it can also be high stakes and have major consequences. The current major example, other than the AZ redistricting thing, are the efforts to rig the electoral college for Republicans by changing Pennsylvania and Wisconsin to a districted electoral vote scheme instead of the traditional winner-take-all. That's a big deal and quite outrageous, in my view.
But the one I'm really worried about is what would happen if the Democrats narrowly defeat a Republican candidate in the presidential election. Could Republicans accept it It seems unlikely, doesn't it? The nightmare scenario is that Democrats win the presidential election by a handful of Electoral Votes; Republicans allege fraud, but fail in attempts to overturn it in the courts; and then in one or more states that voted for the Democrat but have Republican state governments, the legislature nullifies the states' election and installs a slate of GOP electors.
That could happen either in a state where fraud was alleged (as was threatened in Florida in 2000, although in that case it was a threat to overturn state judicial rulings, not about fraud in the voting per se), or it could happen in a completely unrelated state acting in sympathy with the supposed victims of corruption in a Dem-run state. Either way, it's hard to imagine the effects on US democracy. It's one thing to have an election turn on regular, if unusual, judicial proceedings; it would be quite another for the current incumbent party to essentially nullify an election.
Could it happen? I'd have to say that at this point I'd almost expect it to, if the conditions allow it. Let's see...if there's a very close race, it's virtually certain that there will be accusations of fraud in one or more very close states, and that solid partisans will mostly believe those accusations (remember, many on the left believed, and probably still believe, that the 2004 election was stolen in Ohio, although the evidence does not support those claims). The question is what the losers would do about it. Take it to court? Of course; that's what Al Gore and George W. Bush did in 2000, and Richard Nixon did in 1960. But would they take the extra step to legislative nullification? That's the harder question. I believe it's likely, but there's no hard evidence one way or another.
Now, whether the opportunity would ever arise is another question. Elections that are close enough that a handful of electoral votes could make the difference are rare. And of course generally one would expect states with solid partisan legislatures to go the same way in presidential elections. Since you need enough electoral votes in the nullifying states to successfully flip the election, that narrows it further (depending, that is, on how close the national vote is); usually a New Hampshire isn't going to do the job.
But if it did happen? Yeah, it's a nightmare, alright. And the more we see things such as the Arizona redistricting thing, the more likely it seems to me that the current crop of Republicans would do exactly that if the opportunity ever occurs.