He’s a phony.
To the extent that his ‘conservative problem’ has to do with his LDS faith, it’s orthogonal to the problems mainstream Americans have with conservatives. There’s fairly widespread awareness that fundies and Mormons have very similar, very conservative politics, yet still are mutually suspicious.
There are quite a few Mormons where I work, and I like practically all of them a lot. But as I think about each of the ones I’ve known well in turn, one appealing trait common to all of them has been their genuineness.
Mitt, of course, is a total phony. I can’t speak for anyone else, but for obvious reasons, there’s going to be no carryover from how I feel about my Mormon friends to how I feel about Mitt.
More important, McCain really doesn’t like Mitt. If he picks him as veep anyway, it’ll be just another political calculation from the old straight shooter.