The video did cause mass protests, and Al Quaida took advantage of the protests and attacked the US Consulate.
Apparently not in Libya. They have been saying that there was no protest at all, just an attack.
The question is, did Obama have that early on, and continue the "video story?"
A secondary question is, did the Obama administration have reason to believe that the consulate was unsafe.
International intelligence is a complicated business. Maybe other US facilities were at risk and calling out the terrorists too soon would only have provoked more anger and potential attacks? Blaming it on the video/appearing sympathetic to Islam might have been an effort to avoid additional violence/destabilization.
We don't know what was going on, and it probably won't be appropriate from a national security standpoint to reveal exactly what was going on for years to come. I don't see the controversy here. The CIA and the State Department obviously lie everyday and save American lives in the process! I see people using a tragedy to score political points.