As this article shows (http://www.timesonline.co.uk/tol/news/politics/article7054655.ece), polling in the key marginal seats is essentially, neck and neck with occasionally Labour pulling ahead to a o.6% margin, while this is certainly not much it is far better than it was about 6 months ago.
But what has gone wrong for the Tories, throughout most of 2009 they were often polling around a 15% lead, this has been drastically slashed to around 6% now and because the FPTP system heavily favours Labour (the great irony of Tory opposition to the proposed AV system) it would mean the Tories would only just be the largest party in a hung Parliament by 3 or so seats. There are a number of reasons I believe for this decline:
Obviously, these past 2 months for Dave have not been his best, Ashcroft non-dom revelation, changing tack on spending cuts, 3 times getting the statistics wrong (crime, teenage pregnancy rates and the number of votes cast at the last election). But, I personally think there is one simple reason, they have got complacent, the Tories believe they will be able to just waltz into No. 10 and in doing so have not made the policies bomb-proof (so to speak) for when the spotlight was turned upon them. Back in 1997, New Labour feared Major and the government and so they ran a highly tight campaign, not leaving room for error. This is the Tory’s greatest failure, underestimating Labour.