I'm sure Blair's not consciously lying, but I wouldn't mind betting that he's being economical with the truth.
For example, even though most of the Arab desks at the FCO and inside GCHQ and MI6 pour scorn on any notion of links between the Ba'ath regime and Al Queda, Blair has said nothing to counter the absurd and unfounded claims of Rumsfeld et al that there is a clear link (claims which have led some people to believe that Iraq was behind the September 11 attacks!).
The 'dossier' of which the post-graduate paper formed a part is another example. Yes, Glen Rangwala's student stands by his 1992 paper, but he does not believe that it justifies a pre-emptive attack on Iraq without the backing of the UN. The chunks that were lifted straight from public-domain material published by Jane's are also agreed by most analysts. What few will accept, however, are the conclusions drawn from the 'evidence' in the dossier.
I believe Blair to be utterly sincere in his belief that Saddam is a bloodthristy despot who is prepared to bleed his own country white and to trample on human rights.
He may also believe that Saddam could pose a danger to neighbouring states at some time in the future, and that he may be tempted to furnish terrorist organisations with weapons of mass destruction at some point in the future. All of which, Blair believes, should be nipped in the bud with firm action on an international basis, backed by the legal and moral authority of the United Nations.
I do not believe, however, that he believes in the Project for the New American Century - the ideological basis for the forthcoming attack on Iraq - or that he supports the Rumsfeld/Cheney doctrine of side-ining the UN and ensuring that Europe does not develop its own security arrangements.
The trouble is, the poor sod has hitched his star to Bush's, and I fear has learned too late that this entails swallowing the fundamentalist Christian right-wing lunacy that seems to epitomise the current US administration.
Like most British leaders since WWII (with the exception of Wilson), Blair seems to place a pathetic faith in what we on this side of the Atlantic call the 'special relationship' (interesting that, in the past year, the leaders of Spain, Russia, Mexico and Pakistan have all been encouraged to believe that they have a unique and special relationship with the USA). That 'special relationship' was shown to be specious at the time of Suez, and has been a joke ever since, yet Blair honestly believes that his 'good friend' George Bush is acting out of altruism to make the world a better place for all of us (except, maybe, British steel-workers).
So, Blair probably isn't a lying sack of shit - but it's a fair bet that he's shitting himself and wondering how the hell he got so out on a limb with the current US administration. Sad really, given that he has apparently tried genuinely to make a legitimate case for action against Saddam via the UN only to find out that his views are completely irrelevant.
Thus, if one wants to bandy around terms like 'useful idiot', Blair would seem to be a prime candidate.

I remain, Sir, your humble and obedient cheese-eating surrender monkey!