In 2004, Dino Rossi came within a flea's eyelash of winning Washington's gubernatorial race. He lost by 129 votes out of 2.8 million ballots in the closest statehouse race in our nation's history.

Keep "129" in mind as you read this, because it's never been far from talk of Dino Rossi, who's making signs of a rematch with Gov. Chris Gregoire, the Democrat who got the title and, as Rossi wants you to believe, took Olympia down a road to perdition: misjudgments on transportation, education and, most important, the budget.

Rossi, 47, is a real estate investor and former state Senate budget chairman who helped close a budget gap in 2003 without raising taxes. He's traveling across Washington, giving a presentation on state finances and predicting a fiscal train wreck. There's a polish to his lack of polish. He jokes that his name sounds like a brand of wine. He pulls off a stinging indictment of Gregoire without sounding bitter or resentful. It's a Reaganesque there-they-go-again attack on the Democrats' $33.4 billion budget for 2008-2009: Gregoire and her colleagues have launched so many new spending programs that a shortfall of at least $1.2 billion is inevitable by the end of 2009. Those same Democrats, he says, will raise taxes on business to close the gap. Left unsaid is that Rossi is the best person to stop them.

Gregoire's organization anticipates a rematch, but we're told the governor is not paying much attention to Rossi-in-waiting. "She's busy governing," says Holly Armstrong, Gregoire's spokeswoman, who nonetheless offers a rebuttal. Sure, state spending has gone up, but much of that is filling gaps left by the federal government for important services and making key investments to strengthen our economy. "It's disingenuous to say the budget's too big and not say where you would cut," says Armstrong. "He's the only person who talks about a tax increase."

Recently, I visited the Bellevue office of Forward Washington, Rossi's think tank and publisher of his book, Dino Rossi: Lessons in Leadership, Business, Politics and Life. For now, the group goes long on identifying problems in Washington's business climate (high cost of unemployment insurance, high taxes on business, high failure rate of start-ups), but comes up short on offering specific policies. The ideas come this fall.

I asked Rossi about his 2004 loss. Does he ask whether a few more phone calls could have given him the few votes to win? I wanted a window into the anguish that anyone would feel, but Rossi would have none of that. That campaign, he insisted, was a measure of achievement. "We ran one of the best campaigns this state had ever had," he said. But how did he assess his performance? "We ran a winning campaign," he said. He got so close. The transition was under way, policies were being developed, his daughter was even assigned a state trooper as security on her first date. But a judge ruled for Gregoire and took it away. Did he have a dark moment? No.

Then a window does open. He volunteers that he's proud of the fact that he and his wife handled things with dignity and grace, in public and at home in Sammamish. "My wife and I realize that children are like sponges," he said. "They're going to see everything that we do. And if we had yelled and screamed at home about that 'this is unfair,' I guarantee our children would probably be angry and bitter. But they're not. They're well adjusted, because mom and dad took all things in stride." Put that statement in the context of Rossi's life: the youngest of seven children, a family so broke they drank powdered milk and a mother who struggled with alcoholism. "I will never forget those nights as I tried to shut out the noise of the people I loved the most yelling at each other," he wrote in his book. Thinking at first that he had been evasive, I realized Rossi had described a place far more painful than any defeat in politics.