Dirtmama, have you had your difficult child evaluated? It is important to determine whether there is an element of distorted thinking, or whether your difficult child is just lying to get out of trouble, or for some other reason. The interventions you need to put in place may be different, depending on the underlying cause.
My difficult child 1 lies constantly as well, and has done all his life. He's 20 now and I have not seen any significant change in this behaviour, even though many of his other issues have improved with the right sorts of medications and interventions. The overall pattern of difficult child 1's lying seems to be one of impulsivity combined with instant gratification. He will do or say anything he needs to in order to get whatever it is that he wants, that very moment, with no regard to the consequences. There are times when difficult child 1 is caught red-handed, and still lies about it For example, I ask "difficult child 1, why are you messing with the barbecue controls?" "I'm not", he answers, with his hand still on the knob.
I have learned the following:
1) Assume he's lying, unless there is independent proof that he's telling the truth
2) Make the pain of lying way worse than the pleasure to be gained from the lie.
3) Try not to let it get to you. In some cases, our challenging children are just wired differently. They aren't Machiavellian, so much as just terribly impulsive.
Hang in there.
Trinity