It's not true that LibDems "hold all the cards" following this General Election, but it IS true that they must play those they hold VERY carefully.
For most, if not all, Liberal Democrats, electoral reform is a "must", and has to include fixed-term parliaments and proportional representation. An elected upper house, a directly elected Prime Minister and recall of MPs must also be on the cards for discussion.
Surely the most likely outcome of present negotiations is either a Tory minority government or a "rainbow alliance" agreeing on a programme for economic recovery plus electoral reform? Coalition without PR would be suicide for the LibDems.