I don't know, I thought she was. The first bit sounded believable, but when she tailed off about blue toes and that her story fell apart and the Home owner saw right through her. It may be something that in trying to embellish a true story it fell apart too.
For me it makes sense as well, because she losing her morality against Jame's/Saul grandiose bullshitting/storytelling. Which links into the previous episode when she does the same to the pro-bono case and lies to get her clients to sign the deal on Saul's suggestion..
Which then draws a parallel to Breaking Bad, in that both Saul and Walter are on a descent into revealing their true characters. Whereas, Walter knew 100% what he wanted to do, Saul is half unaware/half aware of what he is doing, but for all intents and purposes, its the same story; its really interesting seeing how his actions changes the world around him, which is mainly Kim.
Weirdly enough, I read a post on another forum this morning where a guy was chastising Kim character for holding Saul back; which is Skylar all over again.