Fending off a tough primary challenger in his re-election bid this year, Sen. John McCain's (R-AZ) newly-developed opposition to the 2008 Wall Street bailout has earned him a round of criticism from liberals and conservatives.

McCain this week told his home-state paper The Arizona Republic that he was misled by the Treasury and Fed leaders on the nature of the bailout. He claimed his support of it rested on the fact that they told him it would address the housing crisis, rather than rescue the collapsing banks.

He also alleged he was called by President Bush to suspend his presidential campaign and work on the package, which as the Republic points out, has been disputed by former Treasury chief Henry Paulson's account of the situation.

MSNBC host Keith Olbermann declared Monday on Countdown that "McCain may be lying his way to defeat again." Olbermann said McCain's actions suggest he's "desperate to shake off Tea Party attacks on his vote in favor of the Wall Street bailout."

"In point of fact, McCain decided on the suspension, then called Bush, asked him to call him a summit," the MSNBC host continued. "Now he's trying to rewrite history to make it look like it was all Bush's idea and fault."

Olbermann forcefully criticized the four-term senator during his failed 2008 election campaign, regularly accusing him of being a liar and a hypocrite.

McCain's remarks were also assailed by others, including a fellow Republican who has supported him in the past.

Rep. Barney Frank called McCain's statement "pathetically, obviously untrue" and a "cowardly" misrepresentation of the facts on MSNBC's Rachel Maddow Show on Monday.

GOP strategist John Feehery said Tuesday on MSNBC that McCain has to "face the facts" and accused him of trying to "curry favor" with the Tea Party crowd.

"When he's pandering, he's at his worst," Feehery said, advising him to forget about the "30 percent in the [Arizona] Republican primary who just can't stand the guy."

McCain's challenger, former Congressman J.D. Hayworth, is a staunch conservative and Tea Party favorite. The surge of conservative enthusiasm in the past year leaves McCain, who has in the past worked across party lines, in an uncomfortable position.

The New York Times noted this month that "Mr. McCain now finds himself jammed, moving starkly — and often awkwardly — to the right, apparently in an effort to gain favor among the same voters whom Mr. Hayworth, a consistent voice for the far right, could pull toward him like taffy come summer."

The Times notes that McCain has recently changed his posturing on a host of issues beyond the bailout, including the closure of Guantanamo Bay, campaign finance reform, and gays in the military. Think Progress recently reported on McCain's new-found doubts over climate change science.

Driving home his preferred narrative for the race, Hayworth this week released an ad filled with imagery from Tea Party rallies. The ad labeled McCain a "moderate" and Hayworth a "conservative."

Olbermann showed video footage of Fox News misidentifying Hayworth as a former "Congresswoman", and joked that "apparently someone is still pulling for" McCain.

This video is from MSNBC's Countdown, broadcast Feb. 22, 2010.

Download video via RawReplay.com

The following video is Hayworth's ad, uploaded to YouTube.