The New York Times is reporting interesting fallout over the dissolution between the Nevada Democrats and Fox News, which became official over the weekend as the network was told to hit the bricks.

Senior party officials decided to cancel an August debate amid an uproar among liberal bloggers and activists over the choice of network.

Earlier in the week, a spokesman for Democratic candidate John Edwards informed blogger Markos Moulitsas, of DailyKos, via email that Edwards would not attend the August debate.

This prompted some prominent bloggers and activists to give John Edwards a much-needed pat on the back.

In an email after the decision, the campaign cited a “heavy debate schedule,” but we all know what that means.

At an event in Iowa yesterday, Senator Barack Obama — who was the subject of a joke by Roger Ailes, the Fox News chairman, last week — talked about the issue for the first time.

Ailes, at an awards dinner, had said this:

“And it is true that Barack Obama is on the move. I don’t know if it’s true that President Bush called (Pakistani President Pervez) Musharraf and said, ‘Why can’t we catch this guy?’”

Some say that Ailes might’ve been poking fun at George W. Bush, too, since Osama bin Laden remains at large. But others took offense at the tying of bin Laden’s name to that of the candidate whose full name is Barack Hussein Obama.

For his part, Obama downplayed the incident.

“I didn’t take great offense at the joke,” Obama told the Los Angeles Times while campaigning in Iowa. “I have been called worse.”

So has Edwards. By Ann Coulter.

Obama’s campaign wouldn’t comment last week as pressure mounted for the Nevada Dems to drop Fox as a sponsor, but we’re grateful the network was unceremoniously dumped.

Follow this link to continue reading the New York Times‘ assessment of what’s next for Fox News as the 2008 election season heats up.