I'd say you're right, that is massive. Right now the U.S. debt is $10 trillion+, which is roughly 70% of our GDP. I don't know what Iraq's GDP for 2008 is, but last year from what I can see it was roughly $100 billion with a "b." So their debt is still 10 times their total market value. It's getting better, but still, that's pretty big.
I know I'll probably get pelted w/ rotten tomatoes for saying this, but I just can't see how a "reval" is possible under these conditions. That's OK by me if other people see it otherwise, to each his own.
However, I do think it's worthwhile as a hedge against the almighty dollar - the dinar gained in value while the dollar was sinking. Right now, "$" has rallied (and IQD has continued to improve), but I just can't see that lasting long, the fed's printin presses have had hemi engines put in...