"It's pretty disappointing to see that given that the government is now plotting the single largest power grab in our lifetimes, the Libertarian blogosphere is hardly as up in arms as one would expect."

I suspect the bailout is a bad idea, on a variety of grounds. Hans Bader has a summary of, and links to, many plausible objections. (link corrected.)

On the other hand, as distasteful as the bailout is, if (and that's a very, very, big if), as a practical matter (i.e., even if there are better alternatives, this is the best we are going to do in practice) the alternative is a complete meltdown of our financial system, friends of liberty are in a bind; the bailout is awful, but the current power grab by Washington is nothing compared to what we could expect if, say, commercial lending virtually ceased, and the stock markets fell an additional 50%. I suspect that this dynamic explains why opposition in the libertarian blogosphere is relatively muted; we bloggers don't know how big a threat there really is to our financial system, nor do we know whether, if the bailout fails, whatever winds up happening instead, including future legislative action, will actually be better.