Is reconciliation the way for Democrats to go now on health care reform? No, unless they never want to have power again.
They need to learn from the lessons of Massachusetts. Changing the rules to whatever benefits you at the moment doesn't work in the long run.
Massachusetts changed the law on replacing Senators in 2004 when a Republican was governor, and changed it back after Ted Kennedy died since a Democrat is governor. They got a few months of senator, and Scott Brown gets the finish the final three years of the term.
I've only seen a few places emphasize the rule changes in the Massachusetts political atmosphere, but it had to be there. Especially as Democrats in Washington try to pass health care reform by giving benefits/shielding problems from their friends and family.
Using tricks like reconciliation won't make the public happier with Democrats' work. If you change the rules to keep helping your side, eventually you'll lose the power to change the rules.
Sorry you've got to start over, but the people are speaking.