That isn't just a "cult" phenomenon - as post invasion Iraq unravelled and WMD didn't turn up, there was some reluctance to admit that occupied Iraq wasn't a liberal democracy by, for example, many speakers at the Labour Party conferences I went to. And some of the national press journalists who had backed WMD first kept hoping it would turn up (like the ludicrous mobile weapon labs that turn out to be balloon inflating devices), or seeking other absurd explanations - eg claiming that while Saddam did not have WMD, he had pretended to do so, thereby fooling the world into the invasion. The failure to do anything about the banks apart from shovel more bailout money into their maws also worth noting on these lines.
A lot of SWP members had seen through official lies (the lies about Scargill, the WMD lies , the "market is efficient" lies). so when the Mail other right wing "enemies" picked up this story, they may have thought this proved they were lies.