So can stress cause erectile dysfunction? One European study put elevated psychological stress right alongside high blood pressure as a risk factor.  Still other studies have shown that men with erectile dysfunction have higher reported stress levels. 
So why would stress be a risk factor for erectile dysfunction? It turns that stress attacks almost all of the key pathways that you build an erection and is definitely one of your strongest enemies in the bedroom. As you'll see below, it attacks your erectile strength both in the short and long terms:
1. Testosterone. First of all, we've already covered how Stress Can Whack Testosterone. Remember: "testosterone buildeth; cortisol taketh away." Lower testosterone is certainly not going to help your erections and, if it gets low enough, can cause erectile issues. How? Low testosterone damages internal penile tissues, decreases nitric oxide and can lead to arterial plaque buildup in penile arteries.
2. Penile Arteries. There have been many studies showing that stress leads to heart disease  and we all know that heart disease will directly affect your erectile strength. How does stress do its damage? One set of researchers looked into this and found that chronic work stress led to poor lifestyle choices and behaviors, such as smoking, excessive drinking, lack of exercise and Metabolic Syndrome.  Metabolic Syndrome is deadly to both heart and penis.
3. Cortisol. The same study above  found that chronic work stress led to an increased morning rise in cortisol. Other studies have made a similar finding. This is bad for erections, becuase 1) elevated cortisol is associated with insulin resistance  and 2) decreased nitric oxide. 
4. Visceral Fat. Cortisol and stress are also associated with increased visceral fat ("beer belly", "gut", "spare tire", etc.), both of which are very hard on erections.  Visceral, or abdominal fat, is considered the most deadly form of body fat as it rapidly accelerates the risk for cardiovascular disease, stroke and Alzheimer's just for starters.
5. Weight Gain. Researchers recently found out that chronic psychological stress resulted in greater weight gain, especially in sensitive individuals.  The reason? The study authors noted that stressed people eat excessivly whether hungry or not. The old expression "comfort food" is apparently a very real crutch that most lean on.
6. Noradrenaline (Norepinephrine). One little known fact about the penis is the fact that one of the stress hormones, noradrenaline, actually is responsible for keeping you limp. After all, you don't want to walk around with an erection at your next staff meeting, eh? The job of nitric oxide is actually to overcome the effects of this stress hormone and relax your penile arteries enough to let blood to flow into the corpus cavernosus for an erection to occur. However, too much stress and you are swimming upstream.
So is there any way to beat stress and cortisol? Please read my link on Practical Stress Management Solutions for possibilities based on the latest research.
1) European Urology, 47(1):80-86, , "Prevalence and Risk Factors for Erectile Dysfunction in 2869 Men Using a Validated Questionnaire
2) Current Medical Research and Opinion, 2004, 20(5):607-617, "The multinational Men's Attitudes to Life Events and Sexuality (MALES) study: I. Prevalence oSf erectile dysfunction and related health concerns in the general population"
9) Obesity (Silver Spring), 2009 Aug, 17(8):1513-20. Epub 2009 Mar 26, "Social stress, visceral obesity, and coronary artery atherosclerosis in female primates"
10) BMJ 2002, 325:857, "Work stress and risk of cardiovascular mortality: prospective cohort study of industrial employees"
11) European Heart Journal, Advance Access published online on January 23, 2008, "Work stress and coronary heart disease: what are the mechanisms?", Received 1 August 2007; revised 14 November 2007; accepted 22 November 2007.
12) Obesity, 2008, 17(1):72 77, "Acute Stress-related Changes in Eating in the Absence of Hunger"
13) Circulation, 2005, 112: 332-340, "Cortisol, Testosterone, and Coronary Heart Disease Prospective Evidence From the Caerphilly Study"
14) Clinical and Experimental Pharmacology and Physiology, Nov 1998, 25(11):945-946, "THE NITRIC OXIDE SYSTEM AND CORTISOL-INDUCED HYPERTENSION IN HUMANS"