In a dramatic development, Saif al-Islam, the son of Libyan dictator Muammar Gaddafi, was reported free and out of custody early Tuesday morning in Libya.  Though earlier reports had confirmed his arrest and detention, the younger Gaddafi made a surprise appearance at Tripoli's Rixos Hotel where much of the foreign press is quartered.  A second son of Gaddafi, Mohammed, who was also reported as detained is now also apparently not in custody.

The CNN live blog carries this report detailing the experience of correspondent Matthew Chance:

 

Chance, who is with about 35 other journalists at the hotel, said an armored Land Cruiser pulled up to the hotel, and people were saying that Saif was inside. "It was just about to drive off, so I went up to it and I knocked on the window and said, 'Dr. Saif, Dr. Saif, can you open the door? We want to ... make sure it's you," Chance said.

"He opened the door, turned the lights on inside the back of this armored land cruiser, and it was indeed him. He was bearded, he looked quite thin. ... He told me that his father, Col. Gadhafi, remained in Tripoli. He said the whole family are in Tripoli."

Chance has posted this account of his encounter with Saif on Twitter: "Saif Gadhafi told me that he had been travelling around Tripoli in an armored convoy the whole time."

Earlier, Libya's ambassador to the United States told CNN that another of Gadhafi's sons, Mohammad Gadhafi, had escaped from rebel custody. The circumstances of the escape were unclear, said Ambassador Ali Suleiman Aujali, an NTC representative.

Rebels had said Saif al-Islam Gadhafi and Mohammad Gadhafi were among three of Moammar Gadhafi's sons that they had captured since Sunday.

The appearance of Saif unharmed in central Tripoli has roiled the entire Libya story.  He was considered the day-to-day manager of the embattled regime, acting as his father's most trusted deputy. His appearance raises questions as to the residual capacity of a regime considered to be on its last legs.