I'm not an expert on this, but I'm pretty sure that Sen. McCain is a "natural-born citizen" and thus eligible to be President: He was a citizen from birth, having been born to citizen parents (his father was stationed in the Canal Zone). My sense is that "natural-born citizen" is most plausibly interpreted as being a citizen from birth.

Nonetheless, I'm pretty sure that the Senator erred when he said,

Barry Goldwater was born in Arizona when it was a territory, Arizona was a territory, and it went all the way to the Supreme Court.

Unless I'm mistaken, the Supreme Court has never decided the issue, nor have lower courts. They certainly didn't do it in Goldwater's case. On the bottom line, Sen. McCain is right, but not because of any Supreme Court precedent.

Many thanks to Prof. William Funk for pointing this out.