I know it sounds trite, but if you can't afford to walk away from a project, you probably shouldn't be contracting to begin with.

I say this from hard experience, the jobs I've taken against my better instincts are the ones that have bitten me badly.

Another thing that's important is to know WHO you are pitching to. I charge predominantly T&M, and my ideal clients are existing dev teams that are looking for an extra pair of hands for a particular project. Matching your billing model with the kind of clients you want to work for greatly increases your chances for success.