Edited out of that clip: McCain's proviso 'as long as American soldiers are not dying.' You can see the whole clip here. McCain says that he's happy to have an extended American troop presence as long as it's peaceful, like the American troop presence in Japan or South Korea.
Now, I think this ad is sleazy because it takes his quote out of context. You can call McCain misguided, you can call him unrealistic or sickeningly optimistic, but to say that McCain wants a hundred year war in Iraq isn't true. This ad says that McCain wants a hundred year in Iraq. It's a straight up lie.
TPM's defended the attack by arguing 1-he's said this repeatedly, in different contexts, 2-it's unreasonable to expect that fighting would die down any time soon.
These points are true, but so what? It doesn't prove that McCain wants a 100 year war, which is the point of throwing up clips saying, 'McCain wants a 100 year war.' It seems to me that until somebody can find a smoking gun quote of his where he didn't add the "as long as..." proviso, that this practice is deceptive.