Gaddafi was holding back the entire time. Reports suggest that the rebels have miscalculated the depth of his support, and have been cornered inside Tripoli. A strike force was defeated outside the city's gates.
This is the real Libya: the nation of city-states ruled over, a la ancient Italy, by one supremely prosperous city at the center. 1/3 of the population lives in Tripoli... those who have prospered under the regime will not give up to Benghazi easily. I think Benghazi should give up, because that city is too powerful to destroy without massive foreign intervention. They can hold the rest of Libya if they want, but Tripoli is well out of reach and ideologically removed from the rest of the country. That city would have to be occupied by a decently sized force before its culture could be converted, over a series of years.
And if Obama does try to send troops there, then I fully support any bids they may make for conscientious objection.