Around three years ago, Joe Perez quit trying to restore his three period-piece Chevys (a 52 and two 68s) and dedicated himself to mending America's politics instead. After seeing Barack Obama's address to the Democratic convention in 2004 he pledged he would join the campaign if he ever ran for president.

"I liked his words of inclusion," says Perez, a Latino born in Nebraska. "That's all I ever wanted, was to be an American. I've been called every derogatory name under the sun but I never felt personally included as an American."

Then along came Obama. Soon after he announced he would be running, Perez cleared the garage of his cars and turned it into the hub of the local Obama campaign in Greeley. People he'd never seen involved in politics before flocked to his back garden, to work phones and lick envelopes in the garage – one of the first activists' centres in the state and probably the country.

This year's midterm elections are proving much tougher, he concedes. Some people have been impatient, the Republicans left the country in a mess and are massively outspending Democrats, and the nation's problems do not fit neatly into soundbites, he says. It's not fair or reasonable to blame Obama, he insists. The polls are wrong. People will come around.

Perez is a believer. The walls of his garage are plastered with Obama's campaign posters and a large cut-out of the President stands in the corner. He feels more is being asked of the president than any one human being can reasonably deliver. For every question about the president's inadequacies he has an answer rooted in someone else's mistakes. Unfortunately for Democrats, compared to two years ago, there are relatively few like him. People aren't coming around.

In the race for Colorado, Senate Ken Buck, a Tea Party Republican, holds a narrow lead over the Democrat, Michael Bennett. In Perez's congressional district the incumbent Democratic candidate, Betsy Markey, is trailing so badly that the day before I met him the party wrote her seat off as a lost cause and stopped channelling funds her way.

It's not difficult to see why. Last month saw a record number of foreclosures with the repossession of 100,000 homes by banks; last week saw claims for unemployment benefit rise. Troops in Iraq and Afghanistan are still serving and dying. Despite financial regulation, Wall Street is poised to pay itself billions in bonuses; despite health care reform, millions are still not covered. Some of the more long-term benefits to his agenda have not yet kicked in; some of the short-term benefits have not been that great. In Chafee County, a Republican stronghold where Democrats came within 13 votes of winning two years ago, activist Tom Thomas admits his most persuasive argument to reluctant Democrats this year is possibly his weakest. "I tell them look at who's going to get in if we don't win." Some Democratic candidates have started to run ads distancing themselves from the President. When asked what grade they would give Obama if they were his teacher, even his most ardent supporters give him a C.

There are two popular answers to the question: "What happened to the euphoria of 2008?" The first is that Obama promised more than he could deliver. His rhetoric made people hope change was imminent, his administration has now shown them how limited the scope for change really is.

"It was my first time voting," said a student outside the Colorado senatorial debate last week. "I was campaigning for Obama and helping him get the vote out. I grew up under Bush. During my entire conscious life politics sucked. Finally something really exciting happened. But it didn't deliver as much as I expected it to."

The second is that people expected more than was possible. On Thursday, a student in a town hall meeting asked Obama why he had not ushered in a post-racial society. A few weeks ago Velma Hart was asked whether her hopes in the president were realistic after she told him: "I'm exhausted defending you."

She answered: "Absolutely. It took decades to get here. He's only been in office for two years. But I guess I started to believe, on some small level, that he had a magic wand."

Obama's dilemma can be exaggerated. Over the last few weeks he has held huge rallies across the country in an attempt to galvanise his base and has been enthusiastically received. He remains by far the most popular serving politician in the US and is in similar shape to Bill Clinton or Ronald Reagan at this time in their first term. He is also more popular than his own party, the Republican party and any potential Republican contender. Some at least are keen to couch their disappointment in context to what he followed. "He took over a sinking ship," said one man in Greeley. "You can't expect one guy to plug all the holes." Unlike George Bush in 2006 Obama is not yet toxic throughout the country.

Nonetheless, the unique coalition that Obama built to cruise to victory two years ago is crumbling. Back in 2008 he received the vote of 97% of Blacks, 67% of Latinos, 63% of Asian Americans and 67% of white union members. In galvanising large numbers of new people to go to the polls he also transformed the electorate. Blacks voted in greater numbers by 14%, Latinos by 25% and young people aged between 18 and 29 by 25%.

Now that electoral alliance is falling apart. In 2008, 62% of young people between 18 and 29 aligned themselves with the Democrats compared with 30% for Republicans. By the end of last year that 32-point lead had shrunk to 14 points. Just 44% of college students approve of Obama's performance today compared with 60% in May last year. While the Democrats have maintained their lead among Latinos, far fewer of them appear likely to vote than Latino Republicans. Paradoxically the group among which he does best – black Americans – is also the group that has fared worst under his tenure. Unfortunately for Democrats, America's black population happens to be underrepresented in the states and seats that are up for grabs.

When it comes to the breadth of support the Democrats fare respectably well. A recent Gallup poll of registered voters gave the Republicans a three-point lead. But when the issue turned to who was most likely to show up to vote, the Republican advantage leapt to double figures. That discrepancy is what has become known as the "enthusiasm gap".

The good news for Democrats is that their supporters are not going over to the Republicans. The bad news is they aren't necessarily going to the polls, either. So the task between now and election day is not so much political as organisational and presentational. They have a receptive audience; they have not yet found a way to captivate them. They have to reframe the last two years not as the dispiriting end of a lost opportunity but the tough beginning of a transformational period.

That won't be easy. Sandy Wilson works in advertising in Colorado Springs and now fears the Democrats may have sold her a bill of goods when she voted for Obama. "The campaign did a great job of getting me excited and looking forward to four more years," she says. "But for the most part I've been underwhelmed. I haven't seen any of the changes and the hope that he had promised."

Wilson (not her real name) knows she won't vote Republican. Whether she votes at all, however, is entirely another matter. Is there anything Obama could say to persuade her one way or another? Wilson pauses.

"No," she says.