Top Row: Dr. Manhattan
Bottom Row: Rorschach, Nite Owl, Silk Spectre, Ozymandias, the Comedian
Nope, when Alan Moore wrote his proposal for the series, he had in mind some characters from Charlton comics, which, at the time, had just been purchased by DC Comics.
So for example, going clockwise from top left: The Question, a Randian Objectivist, was turned into Rorschach; Captain Atom, with nuclear powers, was turned into Dr. Manhattan; the Blue Beetle, a rich scientist complete with a Golden Age predecessor and flying animal-themed vehicle, became Nite Owl; Nightshade, a woman who was dating Captain Atom, was turned into Silk Spectre (although it could be argued that she was pretty much just substituted with Black Canary, who had no powers and a superheroic mom); and Peacemaker, who preaches peace with guns, was replaced with the Comedian. As for Ozymandias, he was derived from Peter Cannon, Thunderbolt, who trained his body to near-perfection.
In all these cases, Moore and Gibbons took the characters to even more extreme degrees - Dr. Manhattan, for example, was more distanced from humanity, and more powerful than Captain Atom.
So, that's something you may already know, but did you know that the Charlton heroes were not Moore's first choice for this series?
Moore conceived the idea that eventually became Watchmen with the MLJ characters, better known as the Mighty Crusaders, or the Archie Heroes, because they were being published by Archie Comics:
Moore never says how far he went in his treatment, just that the dead superhero to begin with (the one who would later be the Comedian) would be the original Shield (that's the dude in the middle up there). And then it would draw out the rest of the Crusaders, including Joe Simon and Jack Kirby's third (by my counting) patriotic superhero, Private Lancelot Strong, the second Shield:
I don't know how that particular final product would have resembled what became Watchmen. It or anything that didn't involve the Watchmen characters probably would not have had the impact that it did, since a huge part of Watchmen was what someone like Dr. Manhattan brought to the table, but I do think it was interesting that in 1983, even before Watchmen, Archie was (under the Red Circle imprint) already putting out the characters in more contemporarily-drawn and written stories (with art and story by Rich Buckler):
I do think it's a safe bet that Fly Girl would have been in the Silk Spectre position, though. And Hooded Justice from Watchmen seems to be inspired by MLJ's Hangman. (That's the green dude with the noose in that group picture above).
Alan Moore has even said that in general, the very bare bones of the Watchmen plot could be applied to any small superhero universe (meaning not Marvel or DC). This is true because the story wasn't really about its plot, but the nuances and devices they used to tell it. So technically, you could take the barest treatment of Watchmen and apply it to any other property. Moore said he thought of using the T.H.U.N.D.E.R. Agents:
And in 1995, Douglas C. Atkinson wrote, for fun, a script that featured the other Archie Heroes: Captain Hero, Pureheart the Powerful, SuperTeen, and Evilheart, which you can read here (I recommend reading it. It's good fun):
Watchmen has been blamed for kickstarting the grim-n'-gritty movement, but honestly, I'd like to see someone take a more serious look at properties like Cat-Man and Kitten:
And I would honestly pay serious money if someone actually made this loser, the Captain Marvel of the 1950s, worth reading. No, seriously. I would fork over like 4 dollars an issue for six issues if someone made this guy contemporary, relevant, and good to read. Because I think it's impossible.
Thanks to Dial B for Blog for the Pureheart/Superteen/Captain Hero graphic, and to Comic Book Artist for the information!