Yes, most Americans believe that Sadaam had something to do with 9/11. Even after all the lies and manipulation that has surfaced.
Mainstream journalists are terrified of doing any real investigative work when it comes to U.S. foreign policy. Ok, closer to the truth is probably that the journalists aren't assigned projects like that. The particular political leanings of a reporter are irrelevant for the most part. Individual reporters (unless they're superstars like Dan Rather) don't decide what stories to cover, or how they should be reported.
Mainstream news, like most of Americans television, is all about selling advertising time. In other words, we get the news we ask for. We aren't being challenged and engaged because that's not what sells product.