Maybe Shepard Fairey, beleaguered street artist, has now admitted to lying about his use of AP photos in creating the iconic "hope" poster featuring Barack Obama. His lawyers have withdrawn now that the lies have come to light (lawyers withdrawing from lies? that's a new one). It's unclear whether Fairey's countersuit against the AP will continue under other legal guidance, but it seems unlikely.

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Which AP image Fairey actually used has nothing to with with his lawsuit against the AP regarding fair use.
Though an unfortunate distraction from the actual issue at hand here, Fairey definitely intends to pursue his lawsuit that claims his use of the Obama image changes the original intent of the AP image and is there for fair use:
http://obeygiant.com/headlines/associated-press-fair-use-case
my understanding was that shepard's lawyers withdrew from the case due to his misrepresentation of the situation, which certainly has something to do with the lawsuit. it does sound like he plans to continue the case, presumably with alternative representation.