I think you are on the right track. I think he is lying and will name someone close to Chaney or Bush.
He and Fitz had this worked out.
Seeing that his entire career has been based on the lies he told about Watergate, what makes anyone believe he wouldn't do it again.
Woodward also got a lot of mileage out of what William Casey (AKA "Mumbles") supposedly told him on his deathbed.
I don't trust Woodward either...BUT remember. He DIDN"t go to Fitz on his own...he was "outed" as the recipient of info by the source himself. Therefore.. I have to believe that if he had info that implicated a higher administration official, he would have written story after story about it and gotten the same kind of glory as Watergate.