The best guess (without knowing what the White House knows) is that Saddam doesn't have nukes, but he's close to getting them, and if we don't act, he'll eventually have them, and the type of scenario you mention will be a reality. Who wants to risk that? Maybe Tom Daschle, at least until November...
I think his weapons are in position - not nuclear bombs but weaponized anthrax. On command, an Iraqi janitor in every major city could take a couple pounds of the stuff in a soap container to the roof of a skyscraper and fling it over the side, killing 100,000 or more people. I think that was the point of last year's post 9/11 attacks - a warning that there was more to come.