I think there has ben a lot of confusion over Ahmad Chalabi over the past few months. First, it appeared that the neocons wanted him because he had promised to make Iraq Israel-friendly (which pleased the Richard Perle wing), and becasue he claimed to want democracy (which pleased the Wolfowitz wing) then he was accused of being an Iranian agent (which is neither particularly pro-Israel nor pro-democracy), and so many wonder whose side he is on.
The answer is, in my opinion, obvious.
He is on the side of Ahmad Chalabi.
He will say whatever it takes to get your support, which explains him smooth-talking Israel-supporters (note that I don't say that Israel was necessarily fooled - I'm not entirely certain that the Israeli government always wants the neocons' help) and Iran at the same time.
This would also, by the way, answer Michael Ledeen's question of why the Iranian agents would use a broken code to inform their higher-ups that Chalabi had told them that the code was broken. They recognized him for the duplicitous little **** he was and decided to make certain that he lost face in the eyes of the Americans so he didn't gain any power. This would also be a good way to confirm whether or not the code had actually been broken.