New York (CNN) -- In a revelation so serious that it could collapse the case, prosecutors will notify a court Friday of troubling credibility issues with the woman who alleged sexual assault against former International Monetary Fund Director Dominique Strauss-Kahn, a source familiar with the case told CNN.
Credibility issues are so grievous that incontrovertible DNA evidence of sexual contact recovered from Strauss-Kahn's hotel suite may not be enough to overcome them.
"It's just an extraordinary, extraordinary development considering this case was brought with such great fanfare by the Manhattan district attorney and they very loudly trumpeted the credibility of the accuser," said Jeffrey Toobin, CNN's senior legal analyst.
"What makes it even more extraordinary is that the (DNA) evidence apparently shows a sexual encounter between Dominique Strauss-Kahn and the woman who is the maid. Yet even with DNA evidence, the prosecution is considering dropping the case. That shows how bad her credibility may be."
Prosecutors disclosed the issues Thursday in a meeting with Strauss-Kahn's defense, the source said. The credibility problems are expected to be explained in a letter to be filed Friday by prosecutors with the court.
Investigators uncovered four or five things that could shoot holes in her credibility, the source said.
Among them was that the woman, who worked as a maid at New York's Sofitel Hotel, "had not been truthful in her application for asylum from her home country of Guinea, or about details about a prior sexual assault," the source said.
The New York Times cited a law enforcement official as saying that the woman has repeatedly lied since her allegation of rape May 14.
"There was more concern about what she told investigators in a very believable way," the source told CNN.
The development is particularly stunning given prior statements by police and Manhattan District Attorney Cyrus Vance, who spoke forcefully about the accuser's credibility, and it could ultimately mean a collapse of the felony case against Strauss-Kahn.
It's unlikely, however, that the felony charges against Strauss-Kahn will be scuttled immediately following Friday's hearing.
"There are a lot of different ways this could go," the source said.
Attorneys for the hotel maid did not respond to repeated attempts by CNN for comment.
While it is unclear what the immediate ramifications are for the prosecution, defense attorneys are expected to ask for a reduction in Strauss-Kahn's strict bail terms during Friday's hearing.
"Prosecutors will not object and, in fact, will ask for a bail reduction," the source said.
NYPD Deputy Police Commissioner Paul Browne told CNN he had "no comment" on the alleged credibility issue with the woman.
Strauss-Kahn, considered a viable candidate in France's presidential election before his arrest, faces seven charges that include criminal sexual acts and sexual abuse. He pleaded not guilty June 6.
Throughout, Strauss-Kahn has proclaimed his innocence. His defense team in June challenged the woman's credibility, threatening to release information that would "undermine the quality of this prosecution and also gravely undermine the credibility of the complainant in this case."
There are "serious issues regarding the credibility" of the hotel maid, a source close to the defense told CNN earlier Thursday.
Strauss-Kahn's defense team will ask for bail modifications at a court hearing slated for Friday morning, the source close to the defense team said.
In previous court appearances, the judge said that if Strauss-Kahn wanted to leave the city, he would require the court's permission. Strauss-Kahn was previously required to turn over his French passport and United Nations travel credentials to authorities.
Strauss-Kahn was released from jail on $6 million bail but is under house arrest in a luxury townhouse in Manhattan's Tribeca neighborhood.
He is under court-ordered watch as part of the terms of his bail agreement and must pay for 24-hour armed guards posted at the door, as well as electronic surveillance.
Strauss-Kahn has been paying roughly $250,000 a month for court-ordered security at the townhouse.
It is possible Strauss-Kahn's attorneys could ask Friday that he be released on his own recognizance, which would mean he would be released without bail.
Prosecutors may object to any request that allows for the return of Strauss-Kahn's passport to travel outside the United States, said the source familiar with the case.
The developments in the case come just ahead of the July 13 filing deadline for the French presidential primaries. If the case collapses, Strauss-Kahn theoretically has enough time to file.
Many of his supporters would still like to see him run, though some Parisians interviewed on the streets Friday said even if Strauss-Kahn was cleared of wrongdoing, it was too late for him to seek office this go-around.CNN's Jim Bittermann contributed to this report.
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