I spent six years in a Canadian poltical party. I was fairly active, attaining positions we could call "lower middle management". My two conclusions:

1) the party system is fairly dysfunctional as ambitious party members jostle for positions of status, influence, and power.

2) the party system cannot fix itself.

Whether the "good" R's form a third party is more or less moot. Yes, such a party could siphon votes away from the current party. But many of these votes would be temporarily parked in the D parking lot. So this third party could backfire. Too hard to predict the outcome to be of any reliability.

Time for a new way, one with no political parties.

http://www.tiereddemocraticgovernance.org/tdg.php

A kinder, wiser, democracy.