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Lucy, the pictures are as plain as day. There is no denying the two were in close proximity with each other and worked together.

What IS missing is the verification that Obama actually made the statement:

“I only saw Rod Blagojevich one time ... and that was in the stands and from a distance at a Chicago Bears Football Game.”

Where is the undeniable, verifiable truth to that statement?

Without the proof, there is no case. It can easily be argued that somebody simply made it up to perpetrate a fictional internet/e-mail myth and accuse Obama of lying in a statement he never made.

This is more interesting:

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0bama’s Noelani Kindergarten records are oddly missing from the the State of Hawaii Department of Education.

This is an important feature because K-records for original school entry would have contained the following:

1. His REAL Birth Certificate.

2. An application with the following:

—1. His Legal name.
—2. Parents or Legal Guardians’ names.
—3. Date of Birth
—4. Place of Birth
—5. Vaccination Records
(revealing a timeline to the place and DOB.)

It also is important for two reasons:

A. The Dept. of Education does not “lose” the records of one particular student. (Who paid whom what sum to make this record disappear?)

B. There would have been NO shameful low-test scores, NO embarrassing Equal Opportunity advancements, and NO trails of fraudulent funding to hide which could possibly ‘excuse’ the quashing of public school Kindergarten entry records.

For the rest of his life he attended very expensive private schools and has had his records legally sealed to deny the public, his true life story.

This is different. Hawaii should be able to verify he attended their school since he is featured in class photographs. State and federal tax dollars paid for his initial year of education. Why is there no documentation?

This is the ‘tip of the iceberg’ of an intentionally erased life of a fraudulent conman and it reeks of complicity by officials within the State of Hawaii’s Dept. of Health & Dept. of Education.
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I think this is a bogus urban legend quote, in fact I'm sure it is, because I would have freaked had I ever heard him actually say it. You were right to question it.

First of all, it's absurd that he would have said he didn't know him. Everybody in Illinois & DC knew Obama knew Blagojevich, even he wouldn't have tried to get away with a ridiculous claim like that.From Jake Tapper last December when the indictiment came down:

And, it should be pointed out, Mr. Obama has a relationship with Mr. Blagojevich, having not only endorsed Blagojevich in 2002 and 2006, but having served as a top adviser to the Illinois governor in his first 2002 run for the state house.

In the Democratic gubernatorial primary that year, then-state sen. Obama endorsed former Illinois Attorney General Roland Burris. But after Blagojevich won, Obama came around enthusiastically. At the same time, meanwhile, Axelrod had such serious concerns about whether Blagojevich was ready for governing he refused to work for his one-time client.

According to Rep. Rahm Emanuel, D-Ill., Mr. Obama's incoming White House chief of staff, Emanuel, then-state senator Obama, a third Blagojevich aide, and Blagojevich's campaign co-chair, David Wilhelm, were the top strategists of Blagojevich's 2002 gubernatorial victory.

Emanuel told the New Yorker earlier this year that he and Obama "participated in a small group that met weekly when Rod was running for governor. We basically laid out the general election, Barack and I and these two."