This is a long post over at Americblog, but it is very important and it is very maddening.
The basic gist is: a while ago British and US intelligence caught an Al Queda (Mohammed Naeem Noor Khan) member and turned him into a mole. AKA they let him go back and talk to the other members, but he was now working for us. A lot of the guys he was talking have ended up being involved in the London attacks.
During the Democratic National Convention, the terror level was raised. People were (and should be) skeptical of why the terror level was raised during the Democrat's convention and part of the reason they gave was the capture of Khan. Well, all of the Al Queda members who were still speaking with Khan realized he was a mole and ran. British officials weren't pleased.