Should California be split into two or more states?

No. As far as i can tell, while republicans have no problem gerrymandering state congressional districts to benefit republicans, thus "disenfranchising" democrats, in California republicans feel disenfranchised. Seems republicans want to partition the state into republican and democrat enclaves since "proportional allocation" of electoral college votes failed.

I think fiscally it would be a nightmare. With California declared dead, do all the bond holders get defaulted on? That would give each of the new states all the assets and none of the liabilities. Do all the state employee retiement programs similarly become null and void? If so what happens to the assets in those funds? I can see huge nightmares akin to those discussed last summer over the EU debt crises and discussion of Greece being removed from the Euro convention.

California holds 55 seats in the House of Representatives. That is about 9% of the House. To allow one State to have such a strong authority leads to an unbalanced legislature. Partitioning the lands in to 2 or 3 states takes away the strong influence of California's 55 Reps lobbying together. The actual process itself would be complicated but it would not be impossible to simply divide the responsibilities of the people between their new geographically determined governments.