The problem is you are confusing liberalism/conservatism with capitalism/socialism....
they exist on different spectrums and aren't necessarily related. You need to understand that before you go posting on this subject.
I understand far more than you think I do apparently. I am still fairly new to this MB, so I understand I have to earn that. I will work on that.
Conservative = A desire to maintain the status quo
Liberal = A desire for evolutionary societal change
...nothing more, nothing less.
It is not quite that simple nowadays. Yet, I can work with your definition.
The Conservative status quo you speak of is the Constitution and the idea of Federalism. Small government (less regulation for example) as was the intent of our Founders. The ability of the power of people to change and even revolt against the government if they so choose. A large and powerful government that has people dependent of it for their vary survival is unconceivable to the Conservative. People have the right and freedom to pursue happiness and not have it handed to you. People have to earn stuff. The representative government should reflect and act on the will of the people and not dictate to the people.
The evolutionary change of the Liberal is eerily similar to the socialist agenda. Notice I am not advocating quite to the level of Communism, btw. This takes the line "promote the general Welfare" from the Constitution and forms the belief that it is the role of government to provide people with essentials of life. The basic difference in "levels" of Liberalism is what those essentials are. Not all Liberals are for full-on Socialism, for example. Yet, Liberals want the government to be the primary provider of these essentials.
There are non-Conservative Republicans and non-Liberal Democrats, btw. However, the majority of Democrats are liberals (Obama, Clinton, edwards, Pelosi, Reid, etc). The majority of Republicans used to be Conservative (Reagan, F. Thompson, Romney, Gingrich, etc). That is up for debate now, though. Republicans have been transitioning to a larger-government style as of late (Bush, Cheney, McCain). So, the riff in the Republican party that you have been reading about exists. More reason why the term neocon doesn't apply to all Republicans. I am not even sure it applies to half currently.
In the interest of time, I am going to stop this right now. Feel free to comment. I could talk this stuff all day. We haven't even gotten into Libertarians, or gotten into the different kinds of Conservatives (social, economical, etc) and Liberals (social, economical, etc.)