Apparently a rogue general working with the protestors has been shot during an interview with a reporter. I've been wondering whether or not things would boil over in Thailand, I now think it's pretty safe to bet they will. Once leadership starts getting killed events tend to start spiralling.
The situation had looked pretty unstable for awhile so it was probably more a matter of when, not if, some type of serious violence would occur (though there did seem a chance of a settlement a few days ago, nothing is ever certain in these kind of situations). I have little idea how things will turn out from this. I lean slightly towards the government being able to hold on and ultimately control events but it will be an ugly road to get there.
To some extent, the very focus of events on Bangkok seems to favor the government. While having the nation so focused on events in a single city makes it easier for a small group to have an outsize impact it also provides a clearer target for the government to seek to isolate and eventually control. On the whole, if the government can keep the worst of things in Bangkok I think they'll pull through. If this spreads things look bad for them. All this comes with the caveat that I'm thinking things through from more general comparisons and not specifically through knowledge of Thai politics.