I graduated from Reed College in 2005 and was in your situation last year. I took the physics GRE, got the exact same score 680 (55%), and failed to get into any of the top places despite good grades and letters of reference. I decided to give it another shot and reapply this time around, so I retook the physics GRE and got an 840 (83%), which (in addition to some research experience in industry) should make things much better this time around.
In general, students from (good) liberal arts physics programs have no trouble getting into top grad schools provided they can score well on the GRE and demonstrate some potential for original research. In fact, quite a few of my classmates (with good scores) have done pretty well for themselves and are now at MIT, Berkeley, Chicago, etc.
Edit: I think the "liberal arts cutoff" is somewhere around 700. Almost everyone from Reed with a physics GRE >700 got into a good grad school. Take that with however many grains of salt you wish.