Her experience was over-dramatized by a section of the US media to the point of turning it into blatant government propaganda.
"It no longer matters in America whether something is true or false. The population has been conditioned to accept anything: sentimental stories, lies, atomic bomb threats," said John MacArthur, the publisher of Harper's magazine.
Lynch was in a 507th Maintenance Company convoy on 23 March when her company was ambushed near the city of Nassiriya. Eleven soldiers died and nine were wounded in a 90-minute firefight.
She became a national hero after media reports quoted unnamed US officials as saying she fought fiercely before being captured, firing on Iraqi forces despite sustaining multiple gunshot and stab wounds.
Later, it was discovered that Lynch was injured when her Humvee crashed into another vehicle in the convoy after it was hit by a rocket-propelled grenade.
Far from a scene of battlefield heroism, the convoy blundered into the ambush after getting lost and many of the unit's weapons malfunctioned during the battle.
The US war machine spun
a heroic yarn around Lynch
The US military also released video taken during an apparently daring rescue by US special forces who raided the Iraqi hospital where she was being treated. Iraqi doctors at the hospital said later the US rescuers had faced no resistance and the operation had been over-dramatized for television cameras.
Lynch herself has been quoted as saying she can remember nothing of the ambush or the rescue. A spokesman for US Central Command in Florida had no comment when asked about assertions that the heroism tale was government propaganda.
The Washington Post, which was the first to report the sexed-up heroic version of Lynch's capture, came under sharp criticism from its own ombudsman, Michael Getler, for its handling of the story.
"Why did the information in that first story, which was wrong in its most compelling aspects, remain unchallenged for so long?" Getler asked.
"What were the motivations (and even the identities) of the leakers and sustainers of this myth, and why didn't reporters dig deeper into it more quickly? The story had an odour to it almost from the beginning," he said.
The Lynch story also exposed CBS News to criticism after the network offered Lynch a movie deal while trying to persuade her to give an interview about her experiences. On Sunday, CBS Chairman and Chief Executive, Leslie Moonves, acknowledged CBS News probably erred in offering the deal.