I've read the main body of the Phase2 report (pdf) on Chalabi and the INC.
Here's what I learnt:
1. the CIA thinks that CurveBall's association with Chalabi and the INC is completely coincidental. Chalabi and the INC say that they don't even know who Curveball is.
2. the intelligence community apparently doesn't have an effective system for retracting statements and/or issue warnings once a report goes out. So, let's say, that they distribute a report saying that a source who appears very credible says that Saddam has a 100 nuclear weapons, but then they later realise that there's no way the source could possibly know this, then they send out a new report saying 'oops - our bad.' The problem is that the new report isn't appended to the first document, and no-one ever reads the erratum.
3. The result of 2) is that 'Source Two' was busted as a liar in the middle of 2002 after lots of his stories about Mobile Labs got into the Intelligence Community. There were four new reports written describing the fabrications and his untrustworthiness - but the stories still made it into the NIE and Powell's UN speech.
4. The CIA funded the INC till early 1997. In March 2001, State funded them till Sep 02 when they pulled the plug, so the DIA stepped in and saved the day and paid the bills - on the proviso that INC couldn't do anything without getting written DIA approval.
5. The CIA and the DIA knew that the INC had been penetrated by hostile foreign intelligence forces - Iran, and probably another.