It’s a pity, he’s a good man, and he has now announced that he won’t be running for reelection.

He’s leaving because he believes that it’s an uphill fight for him to win the election:

Polling in Connecticut suggested that Mr. Dodd had been hurt both by his association with Countrywide and by criticism for his role in legislation that appeared to clear the way for bonuses to be paid to executives of American International Group, the insurance firm that received a government bailout. (Last month, Kenneth R. Feinberg, who is charged with monitoring pay at companies that received taxpayer bailout funds, imposed pay limits for A.I.G.’s top executives.)

Republicans had viewed the Countrywide loans and the A.I.G. bonuses as potentially powerful weapons in the campaign.…………”

His spending a year in Iowa to run for President, and the Countrywide loan deal, which he was personally unaware of, hurt him, but what really hurt him was the AIG bonus scandal, where the Obama and His Evil Minions^™, most notably Timothy Geithner, strong armed him into including a section in the relevant bill to allow the obscene bonuses, and then refused to admit the truth for weeks, leaving Dodd twisting in the wind. (See here, here, and here…………Note that the first link has my prediction that, “Geithner will be gone by June,” so much for my powers of prediction)

[on edit]I forgot to note that Connecticut Attorney General, Richard Blumenthal (D) has announced that he will run, and is now the presumptive favorite in the heavily blue Nutmeg State.