The answer may be: No it is not too late, but it is getting very, very late.
The International Crisis Group has released a fairly thorough report outlining what can be done (and in their minds must be done) to keep Iraq from falling into a sectarian abyss.
Here is the quote that from the Executive Summary that got my attention:
“Today, however, the more significant and pressing question is what still can be done to halt Iraq’s downward slide and avert civil war. Late in the day, the U.S. administration seems to have realised that a fully inclusive process – not a rushed one – is the sine qua non for stabilisation. This conversion, while overdue, is nonetheless extremely welcome.”
Real Dialogue, that is geared toward an inclusive society with shared power and interdependencies built into the governmental structures, and where reconciliation is possible seems like the only hope. The question now might be: Who has the leadership capabilities and skills to convene and sustain such a process?
The report also has is extremely pragmatic recommendations as well. Consider this recommendation to the international community:
"Finally – and regrettable though it is that this is necessary – the international community, including neighbouring states, should start planning for the contingency that Iraq will fall apart, so as to contain the inevitable fall-out on regional stability and security. Such an effort has been a taboo, but failure to anticipate such a possibility may lead to further disasters in the future."
Again, here’s the link.