Thanks, that is encouraging. However, during the time period while an attacker had control of 51% of the cloud, could they destroy/redirect all records of existing bitcoin ownership - or new ownership going back ___ (please estimate) weeks?
The community would have their choice of ways to respond and I can only guess at what would happen. Presumably, stakeholders would agree on the scheme that does the least damage. I would guess that this would be "rewinding" the block chain to the longest public chain just before the first absurdly large reorganization. Thus, people should be able to defend themselves if they stop trusting Bitcoin as soon as they see an absurdly large reorganization. (I'm not 100% sure about this. Don't go ahead and do it just on my say so.)
Actually, this might be a good rule -- if you ever see a block organization of six blocks or more, you should consider the Bitcoin system broken until you personally confirm that it is still safe. (Have we ever had a reorganization of more than six blocks for a reason other than the system being broken?) With reorganizations smaller than that, you are safe if you wait for six confirmations.
Could an attacker hide within mining pools or is it certain the offending nodes could be detected and removed?
If you mine with a pool, the pool controls what block you build on. You can't trick a pool into causing a reorganization.
I don't want to sugar coat things, a 51% attack on Bitcoin would be bad. But I don't think it would be the end of Bitcoin. Too many people have too big an incentive to get the system fixed.
The biggest threat would be to miners because one obvious solution would be to change the mining algorithm and force the attacker to start over from scratch. But I don't think it's likely the community would adopt this solution -- for one thing, miners would oppose it.