GOP leaders are showing signs of panic after the Republican Party lost three straight House seats in what should have been safe territory. Scandal, campaign financing barriers and a mixed message have left the party waiting for the other shoe to drop.

But with congressional approval ratings so low, Republicans are also wondering why they can't gain ground against the Democratic majority.

"The political atmosphere ... is the worst since Watergate and far more toxic than the fall of 2006 when we lost 30 seats," Rep. Tom Davis, R-Va., wrote GOP leadership after Democrat Travis Childers won a Mississippi special election Tuesday in a district that had been in GOP hands since 1994.

That victory came a week after Democratic Rep. Don Cazayoux won a House seat in the Baton Rouge, La., area in GOP control for three decades. And in March, Rep. Bill Foster won election in Illinois to succeed former House Speaker Dennis Hastert.

"Trust me, we're very disappointed," House Minority Leader John Boehner told FOX News.

The sense of doom for Republicans is compounded by an historical backdrop that shows Democrats have a keen ability to take huge majorities when their stock is high.

Under President Lyndon Johnson, the Democratic House majority reached 155, and in the second term of President Franklin D. Roosevelt, Democrats held the highest-ever majority -- by 246 seats.

In the post-Watergate era following Richard Nixon's resignation as president, Democrats surged to a 147-vote majority in the House of Representatives.

The last time Democrats led by 100 seats was in the early 1990s. Republicans may not be looking at a fate quite so bleak this fall, but it could be close. The Politico reported Wednesday that GOP operatives fear the party could lose 20 more seats in the House, and at least five seats in the Senate. Republicans are 37 seats down now heading into the November contest.

The GOP also faces a steep cash disadvantage. As of March 31, the Democratic Congressional Campaign Committee enjoyed a cash advantage of $44 million to $7 million.

Republican Roadmap

Republicans are pinning some of their hopes for the fall on wealthy, self-funded candidates, but Republican leaders are also retooling the party image in an attempt to bounce back.

After all, the Democrat-controlled Congress is facing record-low approval ratings. A Gallup poll released Wednesday showed Congress with an 18 percent approval rating, only the fourth time that number has dipped below 20 percent in the 34 years the poll has existed.

"The GOP needs to rekindle their passion for big ideas and not be afraid to create a little controversy," former Bush-Cheney campaign spokesman Terry Holt told FOX News Thursday.

"It took a lot of work to get the majority in 1994, it's going to take the same kind of work ethic .... We need to re-energize an army of advocates and fight the Democrats wherever they come out of."

So far, Republicans -- no matter where they are -- cannot seem to shed the deeply unpopular cloak of President Bush, especially at a time when the economy is tanking and the Iraq war continues to claim American lives. Democrats have argued the reason approval ratings are so low is because of Republican obstruction.

But Republicans are in the process of rolling out a set of new policy initiatives, under the slogan "The Change You Deserve," in hopes of preventing a total landslide and emerging as the party of the people.

The first part of it, outlined Wednesday, targeted constituencies that almost sounded like Hillary Clinton's. It concentrated on helping working-class families, particularly women.

Boehner repeatedly stressed the "change" theme, and told FOX News the party was going to press on addressing gas prices, food prices and access to health care.

"It's time for us to get off the mat and show people that we can, in fact, deliver this change for them," he said.

"Americans know that Washington's broken and if we can't show them how to fix it and how to deliver the change that they deserve then we don't deserve to be in the majority," he said.

Though presumptive GOP nominee John McCain has shown some concern that the political climate could make his run "a very difficult challenge," there is a growing sentiment that McCain will lift up his own party, rather than fall victim to it, in the fall.

One senior House GOP aide told FOX News McCain is the "biggest gift" Republicans could have asked for. Members hope to ride McCain's maverick coattails, the aide said.

Boehner told FOX News he doesn't think Republicans will lose big in November, and seemed to pinpoint McCain as one reason why not.

"John McCain appeals to almost all Republicans. He also appeals to a wide array of independents and conservative Democrats," he said.

"(McCain) does cut a different profile with voters and I think that will be an asset," Holt said.

Objects of Ridicule?

But as the long as Republican candidates keep making the wrong kind of news, Democrats are eager to ridicule them as a foundering bunch.

Scandals rocked the party before 2006, and the latest troubles for Rep. Vito Fossella, R-N.Y. -- who was recently arrested for drunk driving and admittedly fathering a child out of wedlock -- only compound election-day problems.

Fossella is facing pressure from his own party to step down, but some GOP aides want him to remain in Congress until July 1, to eliminate the need for another special election.

Either way, Fossella is the only Republican member of Congress from New York City and his recent revelations could make him yet another casualty in November if he stays in.

Steven Harrison, a Democrat seeking to unseat Fossella, said in a statement: "If he decides to run, the people will decide in November if his recent behavior and revelations should disqualify him from continuing in office," Harrison said.

Asked Thursday if it looked like Republicans were trying to move toward the center and appeal to a more moderate base in an effort to recover in November, House Speaker Nancy Pelosi said: "I wouldn't have the faintest idea."

But she added, "What I see coming out of there is disarray, chaos, dissatisfaction and uncertainty about the future. I haven't the faintest -- I assume that this Republican Caucus will advance an agenda that they believe in, as we do with our agenda, and I think what they believe in is something far different from where the mainstream of America is."

FOX News' Trish Turner and The Associated Press contributed to this report.