There is no doubt that honesty is the absolute best policy, not to mention the fact that the truth is easier to remember! Keep in mind that the way things are right now, even guys with stellar resumes, tons of experience, LORs up the wazoo, etc. are pounding the pavement looking for work right now, and many are not having much luck. Hopefully this will change soon, but the better you are, the sooner you'll get that serious look from a company you aspire to work for. Good luck!