If Iranian Supreme Leader Khamenei dies, then what?

Since October 13, there have been rumors out of Iran that Iranian Supreme Leader Ali Khamenei has died or is in a coma. Michael Ledeen quotes “a person who is in a position to know such things”:

Yesterday afternoon at 2.15PM local time, Khamenei collapsed and was taken to his special clinic. Nobody – except his son and the doctors – has since been allowed to get near him. His official, but secret, status is: “in the hands of the gods”. Reportedly this collapse is natural. Many would like him to move to his afterlife but reportedly the collapse was not “externally induced” [no poisoning]. The few insiders who know about the collapse see this development “as a gift from the gods”. His condition had already seriously deteriorated over the last months, aggravated by his nervous condition due to [1] his inability to solve the problems created by his manipulation of the election results and the refusal of [a large part of] the population to accept this, plus [2] his loss of religious authority by means of the repeated condemnations of events by senior clerics. . . .  Outlook is uncertain but speculation is – considering that he is in coma since more than 24 hours – that he may not come out of his coma and/or that he may die very soon. If he dies it is expected that immediately a bloody clash will develop between the powers behind Rafsanjani, who will immediately claim temporary religious authority and overall control, and the powers behind Achmadinejad who will scramble in order to regain control and ensure their survival. 

The regime-aligned website Tabnak called the rumor a “shameless lie.” Iran’s Embassy in Belarus denied the rumor. (But if you wanted to get out a crucial bit of news, would you use your Belarussian embassy?) As the Guardian dryly remarked: “Of course there is an easy way for the clerical regime in Tehran to put a stop to the current hysteria. But the ayatollah has yet to appear to declare that the reports of his death are exaggerated. Until he does, the chances are the rumours will spread.”
 
Khamenei’s last public appearance was on October 7.
 
We’re still in the speculation stage—instead of exploding, this story could fizzle like Ahmadinejad’s Jewish ancestry. But if Khamenei is indeed incapacitated or dead, this could be a moment of pivotal possibility for Iran.
 
The regime’s method for replacing Supreme Leaders is selection by the Council of Experts. (The Council of Experts is popularly elected, but candidates for the Council of Experts must be approved by the Council of Guardians. The Council of Guardians has twelve members; six are appointed by the Supreme Leader, six are appointed by the head of the judiciary after legislative ratification.) This selection process could take some time, as the ruling class is riven by conflict in the aftermath of the corrupt June 12 election.
 
A vacuum at the top of the power structure could be an opportunity for the pro-democracy forces in Iran. A power struggle could blossom into the long-delayed Second Iranian Revolution.
 
This is much to be hoped for. There is a growing understanding that a more liberal, more democratic Iran would be less likely to continue the manic drive to acquire nuclear weapons. At least, a nuclear-armed democratic Iran would be less dangerous than a nuclear-armed mullocratic Iran.
 
Thus, it is in the interest of America, and the rest of civilization, that if an Iranian popular pro-democracy movement seizes this opportunity, it should receive the support of the United States. President Obama was criticized for his anemic response to the post-election protests in June. He may have the chance to make up for it.