Okay, here's a try:
The Republican primary of 1976 proceeds largely as OTL until the convention. Instead of announcing his nomination of northern Schweiker, Reagan proclaims his desire to fight for the nomination on the floor. He declares the necessity to fight for the morality of the party after the depravity of Watergate and Ford's suspect pardon of Nixon. He rallies conservatives and wins the nomination on the third ballot.
Reagan and Carter fight a bitter campaign. Reagan makes bold promises, which Carter undermines as populist, irresponsible, and ungrounded in fact. Reagan nonetheless ends up going down to defeat when in the televised debates he goes on about how Democrats are responsible for all wars of the twentieth century. [Dole did OTL]. Reagan is defeated by a handy margin, but his electoral defeat is much slimmer; tempers rise when a faithless elector puts Carter's majority in near jeopardy. Ford ends the bicentennial year by straightening out the issue of the faithless elector--the people's will must triumph, he says--and with a memorable Farewell Address, calling for good government and self-sacrifice in the face of national crises.
While a lame duck, Ford manages to finalize negotiations with Panama to secure the canal for the US for an additional twenty year lease (in exchange for concessions with Panama, one of which opens the door to something like free trade). The Chairman of the Federal Reserve unexpectedly dies in December. Ford calls Carter to ask his opinion, in deference to the President elect, but needs to make a choice soon, given the severity of inflation. Carter bungles the issue, making statements about signing the money himself if need be (he wants to wait to make the appointment himself; the statement belies Carter's lack of knowledge and lack of experience). Ford has quite a predicament, since he would rather appoint a conservative like himself (such as Alan Greenspan, then chairman of the CEA), but feels that to do so would be tantamount to defrauding the American people. Hence he selects Paul Volker to head the Fed.
By 1980, Carter looks like everyone's worse nightmare: he is trying to ally with evangelical Christians, which offends the ABC Democrats, and yet he is also making ineffectual shows against the Soviet Union. The last straw comes in the showdown with the Islamic Revolutionaries in Iran.
If the 1976 Republican primary had been contentious, the 1980 election is chaotic. Without a clear incumbent or favorite, the party is deluged with candidates from John Anderson to the charismatic Jerry Fallwell. Reagan makes another bid, but comes in third in Iowa and fourth in New Hampshire, due to misplaced comments about President Carter. When a front runner emerges--in the person of Robert Dole of Kansas--his leadership counts for nothing: two weeks before the convention, John Hinckley, Jr., assassinated the would-be nominee, throwing the Republican Party into utter anarchy. The convention chose Ford on the fifth ballot, even though Ford was not at the convention itself (it was meeting in his hometown, however).
Ford accepted the nomination and ran on a campaign of change, non-partisanship, and quiet strength. Due to the 22nd Amendment, Ford would be constitutionally unable to run for a second term; nonetheless, Ford used this to his advantage by emphasizing his call to service.
The Democratic nomination battle proved if anything equally stunning as Teddy Kennedy, desperate to reclaim "the Party of my slain brothers" from Carter, launched a successful bid for the nomination. He offered Carter the Vice-Presidency, but Carter refused, point-blank. His speech to the convention, supposedly endorsing the nominee, spoke of a national malaise.
Ford won in a landslide, with running mate John Connally (who brought in a tide of Connally-crats from the Democratic Party). Connally beat out a resurgent Ted Kennedy in 1984 and Democrat Al Gore in 1988. Bill Clinton managed an electoral victory in 1992 only due to third party candidate Pat Buchanan (a religious right candidate, under the name "American Party") splitting the vote in the Midwest and Deep South. After two years of policy bluster--national healthcare--and two of scandal that made some old reporters miss Watergate, John Sidney McCain won the Presidency in 1996 and in 2000. In 2004, Al Gore, with running mate John Kerry, won the presidential election after the American Party candidate Rick Santorum derailed Vice-President Jeb Bush's bid for the White House. The American Party since 1994 has maintained a delegation to the House of Representatives, numbering between 2 and 16; between 2006 and 2008, they held what would have been a swing vote to crown a Speaker of the House, but President Gore, in conjunction with former President McCain organized a bi-partisan effort to give that post to Rep. George W. Bush (R-TX), to ensure the continued sanity of the American legislative system.