How Farage's declaration that he would back the Tories changes the dynamics of election 2015

Nigel Farage today announced that he would instruct UKIP MPs to back the deficit reduction plan put forward by the Conservatives. Whilst this may have been seen as a foregone conclusion by many, it is a very significant moment, because it changes the dynamics of the electoral map. Previously, Farage had indicated that he would only do a deal with a party that offered an EU referendum, but his embrace of the Tories' economic plan opens up two new possibilities.

1: A conservative government backed by the DUP and UKIP.
Let's assume the worst case scenario for Ed Miliband. His party finishes on 31% of the vote to 35% for the Tories. Labour are subsequently massacred in Scotland and struggle to make even modest gains from the Tories and Lib Dems...so much so that David Cameron, through gaining seats from his coalition partners, finishes on 310 seats. The 13 seats won by the DUP and combined would be enough to give him a parliamentary majority, though it would be unstable, if he decided on a pact or coalition with them (The 5 Sinn Fein MPs tend not to turn up, and the Speaker is apolitical). In this scenario, David Cameron could govern and remain prime minister, albeit with major concessions to the other parties.

2: But, let us assume that the liberal democrats suddenly lurch rightward and decide that they want to partner with firmly right of centre parties such as UKIP and the DUP. This scenario may become likely, particularly as most Lib Dem MPs that are left will be representing suburban shire seats, particularly as most of the left-wing Lib Dems are likely to fall in battle against Labour. In this scenario, with the Lib Dems winning 30 and the DUP and UKIP winning a combined total of 13 seats, a total of 43, David Cameron would need just 280 seats to remain in power, and would have to rely on an SNP onslaught in Scotland to prevent Labour from winning most seats. This scenario is not particularly likely, but it is possible to imagine a scenario (And even probable) where all 4 parties sign an anti-Labour confidence and supply agreement. Since all 4 parties agree with the economic plan put forward by the Tories in principle, this scenario is becoming increasingly likely.

Either way, election 2015 just got a whole lot more interesting.