So the proper response would be "well, if you won't go our way then we'll nominate someone that enough Dems can get behind to get him/her elected". I suspect the dissenters would rather McCarthy than a moderate Dem.

That's certainly the threat (though the threatened Speaker would likely be a moderate Republican, not a moderate Democrat). But the Democrats aren't going to bail the GOP out of this mess without getting something in return. They'd be perfectly happy to cast 212 votes for Jeffries and let the GOP twist in the wind until the spring. They'd want some sort of power-sharing agreement where the Dems support a GOP Speaker, and the rules get revised to give the Democrats some prerogatives they wouldn't normally have under a Republican Speaker (like being able to introduce legislation or beefed up committee powers). It is by far the least likely outcome, since any GOP member-elects that cut that kind of deal would be ostracized from the party and the new Speaker would be utterly unable to function.

For now, though, it looks like the "I Could Do This All Day" phase of posturing is continuing. They're running the seventh ballot now, and there will be no Speaker on this one (I counted at least five Donalds votes).