Unemployment has dropped nearly 2 percentage points since the Republican was sworn in, to 5.6 percent. He has repeatedly balanced Virginia’s budget without raising taxes while recently putting new funds into higher education and transportation. As chairman of the Republican Governors Association, McDonnell has built a powerful list of fundraising contacts and played an important role in the GOP’s Wisconsin recall victory. In a punishing political environment, his approval rating remains over 50 percent.

In 2012, all of that could get buried under a single word: ultrasound.

A year ago, it looked like McDonnell might spend this year on a glide path to the No. 2 slot on Mitt Romney’s ticket. That was before he spent the past few months grappling with a series of state-level crises: a leadership battle at the University of Virginia, a destructive storm that knocked out power for millions in the Washington area and — most significantly — an attempt by conservative legislators to mandate an invasive ultrasound procedure for women seeking abortions.

A former Virginia Beach legislator, McDonnell, 58, initially signaled he would be willing to sign such a measure — a stance that aides say came from a misunderstanding about the legislation, which would have required women to be examined using a vaginal probe rather than an abdominal ultrasound. When the distinction became clear to the governor, McDonnell called for a change from Republicans in the Virginia General Assembly, who complied with his demand. The latter measure was signed into law.

That solitary piece of legislation has, more than anything else, turned McDonnell’s national political fortunes upside down. Democrats used the proposal to bludgeon the rising GOP leader as anti-women in a campaign that McDonnell admits caught him off guard.

“This was surprising even to me, as somebody who’s advocated for the pro-life cause now for 20 years,” said McDonnell, who pins some of the blame on Democratic legislators seeking payback for their defeats in the 2011 state elections. “When they sensed that they had more of a political argument in the way they framed the ultrasound debate, they were relentless.”

The controversy failed to sink McDonnell at home: in June, Quinnipiac University clocked his approval at a still-healthy 53 percent, even though a majority of voters opposed the less incendiary ultrasound law McDonnell eventually signed.

But nationally, it’s a far different story.

In an election defined in part by Democratic attempts to drive a wedge between the GOP and women voters, the ultrasound flap has tarnished McDonnell as a potential Romney running mate.

McDonnell and his allies are candid about their frustration at what they view as an unfair attempt by Democrats and a conflict-crazed media to rough up the governor. They are also more or less resigned to the reality that the opposition campaign has left a mark.

“What we were doing this session was historic government reforms, historic fixes to the retirement system, the largest amount of money and reform in higher education in decades, major school choice legislation,” McDonnell said in an interview with POLITICO. “I signed 860 bills this year. We got major other reforms accomplished, yet it seemed like because for political reasons, some were continuing to bang the drum that so much coverage got placed on literally one bill.”

McDonnell’s allies in the state are, if anything, even blunter about a controversy initiated by the far-right flank of the GOP-held Legislature and fanned into a national furor by McDonnell’s Democratic foes.

For years, Democrats have tried to brand McDonnell as a hard-line social conservative who cannot be trusted on women’s issues, unsuccessfully trying in 2009 to make an issue of the thesis he authored at evangelical Regent University, which spelled out a strongly traditional view of gender and the family. That document would have been an obstacle to McDonnell in vice presidential vetting even without the ultrasound stumbling block.

But the ultrasound debate gave Democrats another opening to attack, and they followed through with gusto. In the wake of the Supreme Court decision upholding the federal health care law, Maryland Gov. Martin O’Malley swatted McDonnell on an Obama campaign conference call, jabbing: “The only health care mandate [Republicans] can embrace are transvaginal probes for women.”

Between the ultrasound law and the thesis, McDonnell allies are no longer so optimistic that the vice presidency is within his grasp. McDonnell was appointed to lead the Republican National Convention’s platform committee, but that could very well be his last new assignment before Nov. 6.

That doesn’t mean McDonnell’s national prospects are shot for good — his top supporters certainly don’t think so. Lt. Gov. Bill Bolling, whom McDonnell has endorsed in the 2013 governor’s race, argues that the whole ultrasound issue represented an entirely unwanted distraction from the administration’s more appealing jobs and fiscal discipline agenda.

“We’ve been able to develop a record of results over the course of the past 2½ years that’s pretty impressive compared to pretty much almost any other state,” Bolling said. “We were terribly frustrated that the media focus was on one bill and that was the fetal ultrasound bill, when in fact that wasn’t the governor’s bill. You know, the governor had to step in at the last minute and fix the bill to make it more palatable to folks.”

Virginia Attorney General Ken Cuccinelli — Bolling’s opponent for the 2013 GOP nomination — called the ultrasound bill “an explosion of a bomb that [McDonnell] did not plant.”

“There were legislators running around like chickens with their heads cut off all over the place, and it’s awfully hard to be the leader of a bunch of headless chickens,” Cuccinelli said. “In the final analysis, it was a compromise and the votes were there to pass something. I think they handled that radioactive item as best they could.”

That cautious approach left McDonnell vulnerable in the ultrasound debate, as it allowed the issue to take on a dangerous life of its own before the governor weighed in strongly. Had McDonnell clamped down on Republican legislators more swiftly, there’s at least a chance the proposal could have been smothered with considerably less drama.

But if it’s a method of governing that failed to serve McDonnell’s political interests in this case, it’s also one that Virginia Republicans call characteristic of the governor’s administration, which has sought out big victories on kitchen-table issues and played down social issues and other sensational disruptions.

“Look, I’m a social and a fiscal conservative. But what governors need to do is, first of all, run the state well — put the individual citizen first and preserve the fiscal health of the state. So we put most of our resources, most of our time and effort, into fiscal issues,” McDonnell explained. “I’m not going to compromise my conservative principles along the way, but you’ve got to do it in a way where you try to not divide people.”

One McDonnell adviser described the governor’s intervention in the ultrasound debate in these terms: “You had a number of legislators who didn’t read the bill and passed it without understanding what was in it. … He believes in informed consent and is absolutely, 100 percent pro-life. Did he think an invasive procedure went too far? Yeah, he did.”

The recent battle at UVA, McDonnell advisers say, is another case study in the governor’s leadership style. After the school’s Board of Visitors ousted popular President Teresa Sullivan, students and faculty revolted and demanded the president’s reinstatement. Demonstrations raged for days before McDonnell put his foot down, telling the UVA trustees that if they did not restore order by a specific date, he’d fire the entire board.

The Board of Visitors — gubernatorial appointees who are expected to administer the school independently — reinstated Sullivan days later. McDonnell proceeded to reappoint the board’s chairwoman, real-estate developer Helen Dragas, who had led the charge against Sullivan in the first place. The resolution essentially restored the status quo ante, keeping various fired-up state interests at bay.

Like the ultrasound fight, the UVA rebellion was a state-level mess that ensnared McDonnell at a high point for his national fortunes (Sullivan was pushed out weeks after the McDonnell-led RGA helped beat back a recall campaign against Wisconsin Gov. Scott Walker). And much as he did in the ultrasound fight, McDonnell exercised the powers of his office conservatively.

“Those two are parallel — taking a step back, looking at it pragmatically, trying to decide, ‘What is the governor’s role here?’ and then acting,” former Virginia Attorney General Jerry Kilgore said of the UVA and ultrasound debates. “These weren’t things of our doing. They were things that we had to fix.”

Kilgore said McDonnell’s future in Virginia remains bright — and potentially lucrative — regardless of any damage to his image among political elites. Though the governor is term-limited out of office in 2013, other races loom over the horizon.

“He can do what other governors have done, which is go to a variety of law firms. He can go to a think tank,” Kilgore said. “He can continue to serve the public through other means — go to a Romney administration — or stick around and run for some other office, whether that’s U.S. Senate or governor again.”

Pete Snyder, a McDonnell friend who heads the Republican National Committee’s Victory effort in Virginia, forecast even bigger things for the governor.

“He is a relatively young governor. He has tons of opportunities in front of him, I think, on the national level,” Snyder said. “He could have a great future as vice president or in a Romney administration.”

The most buzzed-about scenario in Richmond is one in which McDonnell gets a job in the Romney Cabinet, allowing Bolling to become governor and seek to fend off the popular Cuccinelli — and whomever the Democrats nominate — as an incumbent.

Failing that, more skeptical political observers point out that when McDonnell reaches the end of his term, both Virginia Senate seats will be filled — one by Democrat Mark Warner, the other by either former Gov. Tim Kaine or former Sen. George Allen — and the next presidential race will be years away.

“McDonnell is back down to a minimal majority in job approval. Transvaginal ultrasounds and other controversial social issues have hurt him. … Maybe Romney puts [McDonnell] into the Cabinet,” mused UVA political scientist Larry Sabato, who spoke out prominently in the debate over the university presidency. “Otherwise, I don’t see much for him. He can’t beat Warner in ’14, the other Senate seat won’t be available until 2018, there’s already a line to run for governor in ’17 and I can’t see McDonnell being a very strong candidate for president in ’16 or ’20.”

McDonnell is circumspect about his next steps. Though McDonnell once said he’d be interested in the job of vice president, he’s now tight-lipped on the subject and says he hasn’t discussed the subject with Romney.

He brushed off a question about whether he’d be interested in any other post in a Romney administration, saying he’s focused on making Virginia a “beacon of federalism” during the remaining year and a half of his administration.

“The only time I’ve talked to Mitt Romney about VP was in Portsmouth when we were getting ready to walk out and we both said, if any question comes up about VP, we’re not talking about it,” he said.

“At this point, one, I’m just not talking about it anymore,” the governor said. “And two, if you begin to think about your current job as a campaign for another one, you’re not going to be that effective and you’re going to make mistakes.”