Source: Rehnquist to Step Down Soon, McConnell to Replace
This seems very plausible. Everyone has sort of assumed that Scalia would be picked to be Chief Justice after Rehnquist steps down. There would be a huge confirmation fight even though Scalia was originally confirmed 98-0. It's actually fairly common to appoint someone from the outside directly to the chief position, as opposed to promoting from within. I think McConnell would be a great chief. I would get great pleasure from Scalia as chief, but I can live without it.