I think it would be crazy for Obama to appoint a republican even a moderate one.
No, it wouldn't.
Gun issues can be done via executive order--just enforce the laws on the books. (I'm sure plenty of Republicans, not just ones in Congress, would say that at least some of Obama's recent executive orders on that went beyond what those laws allow, but even if that's true, executive orders can be changed.)
Abortion is another matter, and Sandoval supports abortion rights (presumably freer access than what Reagan favoured, which regularly gets anywhere from 40% to 60% support in polls). That's not something the President can do via executive order, so in the balance, it's probably more important to find someone who'll support abortion rights than someone who will support firearm restrictions.
But the real clincher with Sandoval (if he's the nominee) is that he was a judge appointed by Bush, and he's a sitting Republican governor. That will make it very difficult for the Senate GOP to continue their attacks, and nominating Sandoval could probably get Collins, Graham and McCain (the only remaining members of the Gang of 14) onside, and possibly the one more Obama would need to get the nominee through.