The two leading Republicans vying for the chance to face freshman Rep. Glenn Nye (D-Va.) next year recently squared off against one another in what some considered Round One of their primary battle — even though neither of their names was on the ballot.

Scott Rigell, an automotive executive, and Ben Loyola, an engineering firm owner, backed competing candidates in a fractious Dec. 5 primary for an open state Senate seat in Virginia Beach, the population center of a district that also includes parts of the cities of Norfolk and Hampton as well as the Eastern Shore.

That election — in which businessman Jeff McWaters, who was endorsed and financially backed by his close friend Rigell, defeated Virginia Beach Councilwoman Rosemary Wilson, who was backed by Loyola and his campaign consultants — was viewed in some Republican circles as a proxy fight between Rigell and Loyola.

Though GOP officials in the 2nd district cautioned against extrapolating too much from the results of a low-profile state legislative race, last week’s balloting didn’t diminish a widespread impression in southeastern Virginia and in Washington, D.C., that Rigell is the early frontrunner for the Republican nomination.

The special election is also forcing Republicans to re-evaluate how they choose their nominee next year.

That state Senate election was a party-run affair known as a canvass or a “firehouse primary,— and 2nd district Republicans have scheduled a similar election on May 8 to decide the GOP nomination. Virginia election law allows local political party organizations to decide how they want to select their nominees.

Now Republican officials in the district are rethinking their decision to hold a canvass after more than 7,000 GOP voters overwhelmed the five voting locations that the party set up for Saturday’s election. Party officials will decide next month whether they will stick with a canvass, hold a nominating convention on May 8 or participate in a state-run primary election on June 8.

A primary could work to Rigell’s advantage because he has strong name recognition and the financial wherewithal to wage a paid media campaign. A convention caters to the most determined and energetic slice of campaign activists — a format that might work more to the benefit of Loyola or some other conservative candidates who lack a large campaign bankroll.

Well-connected in the local business, religious and civic communities, Rigell has high name identification for a first-time candidate in part because he’s appeared for 17 years in television commercials promoting his automotive business. He’s racked up numerous endorsements for his Congressional campaign and is a close friend of Gov.-elect Bob McDonnell (R), whom Rigell helped elect to the state Legislature in 1991 and who might formally endorse Rigell. McDonnell’s sister and eldest daughter have endorsed Rigell, and the governor-elect said Tuesday that he “think[s] the world— of Rigell.

Rigell raised $453,000 in this year’s third quarter — his first stretch of fundraising — from a nearly equal mix of contributions from individual donors and from the candidate himself. Loyola technically led in fundraising, with $548,000 in receipts and $537,000 in cash on hand as October began, because he loaned $500,000 to his own campaign.

The National Republican Congressional Committee hasn’t openly endorsed a candidate but has included Rigell — and no other GOP candidate in the race — as an “On the Radar— candidate in its “Young Guns— candidate recruitment program.

Loyola, whose campaign didn’t return a request for comment, said in a recent interview with Roll Call that he’s a “conservative, fiscally responsible Republican who has been loyal to the party.—

Loyola’s campaign has made clear that he will run to the right of Rigell — in part by pointing out Rigell’s campaign contribution in March 2008 to President Barack Obama, who was battling then-Sen. Hillary Rodham Clinton for the Democratic presidential nomination.

Rigell, who has donated hundreds of thousands of dollars to Republican candidates and committees, has described his contribution to Obama as a strategic donation given in opposition to Clinton and not in support of Obama. The Obama donation was sandwiched between donations Rigell made to Mitt Romney (R) in July 2007 and to eventual nominee Sen. John McCain (R-Ariz.) in May 2008.

“There’s no doubt that Scott Rigell’s loyalty was to McCain,— said Gary Byler, who heads the Republican organization in the district.

Rigell could also face questions from conservative activists about his membership in the nonpartisan group Virginia Beach Vision, which has supported raising some taxes to fund needed transportation improvements in the Hampton Roads region.

Loyola will be emphasizing a military record that includes 30 years of service in the Navy. Rigell served six years in the Marine Corps Reserve, and his son is a Marine. Interestingly, the other five Republican candidates also have military records — a plus in a district with a large concentration of military personnel and retirees and their families.

There is concern in some conservative circles that the state Senate race could foreshadow a fractious Rigell-Loyola primary that could hamper the party’s effort to defeat Nye next November. Bearing Drift, an influential conservative blog in Virginia. wrote late last month that the fractious state Senate primary was a “disturbing preview— for the 2nd district GOP race. “Given the rapidly deteriorating environment in the 8th, there is every reason to believe that the 2nd District nomination process will be just as disturbing, if not more so,— the blog said.

The possibility of a rough GOP campaign isn’t lost on party officials in Washington, who generally prefer uncontested primaries to contested primaries. But they’re glad that the 2nd district GOP contest will be held early enough so that the eventual nominee will have plenty of time to replenish his campaign war chest and forge party unity ahead of a general election campaign against Nye, whom GOP officials view as vulnerable in part because Virginia’s 2nd has generally leaned more Republican than Democratic.

“We are fortunate to have a strong field of GOP candidates who are more interested in serving their country than serving themselves, a la Glenn Nye,— said Andy Seré, a spokesman for the NRCC. “No one likes an empty suit, and Nye — who has quickly developed a reputation on both sides of the aisle for shameless political posturing — is looking more and more like a one-term Congressman with each passing day.—

Democratic officials think the Republican race could produce internecine conflict between the establishment wing of the Republican Party and the conservative activist “tea party— wing of the party.