Saddam Did Have The Ability To Produce Nuclear Materials
How do we know? Because 550 metric tons of Saddam's Yellow Cake Uranium just made it safely to Canada.
The intended use for this cake is merely speculation, but it does show that there was a very large amount of radioactive material available to use as he desired. However it is important to note that Saddam was very vocal in the 1990's about getting information and technology to be able to produce weapons grade enriched uranium. Also to be noted is that after the end of the Gulf War where Saddam signed a treaty to dismantle/render harmless all WMD's, there were 40 nuclear research facilities, including 3 Uranium enrichment sites that were completely hidden for over 7 years from the outside world.
Not only was Saddam very effective at concealing his intentions, but he was also moderately effective at concealing the physical aspects of his intentions. This, after all, is the guy whose air-force went missing for almost 5 months before discovering them buried under more than 10 feet of sand, right under the Coalition Force's nose. Who knows what could lie 100 or more feet below the Iraqi sand.