I think that Microsoft will probably end up buying Nokia outright at some point if this slide continues, especially if Google gets serious about making it's own hardware via it's Motorola Mobility acquisition.
Elop was hired from Microsoft where he was the head of the Office division. At Nokia he bet the company on the success of WP7, something every specialist in the market considered insane. Microsoft's money will not last long enough.
To be sincere, I imagined the plan was to make WP7 a success with Nokia's help (after all, they know how to sell phones to telcos, if not to end users). Plan B was to acquire Nokia's patent portfolio. I never had much faith in plan A.