WITHIN THE PAST 10 days, Boston media outlets have reported that Peggy Davis-Mullen underreported income on her 2000 taxes; didn’t file her 1998 and 1999 tax returns; made false statements on two successive applications to the Massachusetts Bar; hired a City Hall chief of staff who was ineligible to work for her because he lived in Cambridge; and managed to bypass a waiting list and get her twin sons into a much-prized pilot-school program earlier this year. Just days after Davis-Mullen — the only challenger to Mayor Tom Menino — brazenly announced her candidacy from an American Legion hall in Hyde Park (Menino’s home turf), most observers declared her long-shot bid a casualty of her own exceptionally bad judgment.

Menino’s 85 percent approval rating (according to both an early-March Boston Herald poll and one conducted later that month by Davis-Mullen’s own organization) and his $1.1 million war chest made a Davis-Mullen victory unlikely in the first place. But the at-large councilor impressed political insiders with her chutzpah. And after nine years of Menino rule — including his uncontested cakewalk in 1997, the first time in the city’s history that a mayor had gone unchallenged — many hoped that Hizzonah would be forced to get out on the stump and defend his policies, actions, and vision for the city. “For the city to go another cycle without a mayoral race isn’t healthy,” says former city councilor Mike McCormack.

At-large councilor Mickey Roache, who earlier this year flirted with his own bid against Menino, agrees. “People want a mayoral race,” he says. But especially after the drubbing Davis-Mullen has endured, no one expects any other challengers to emerge. “You really needed a rebel who was willing to go against such powerful interests,” says Tobe Berkovitz, professor of mass communication and politics at Boston University, “and I don’t see anyone else willing to take on that challenge.” Says former city councilor John Nucci, “I think if Peggy doesn’t stick this out, the mayor will be unopposed.”

If Davis-Mullen does drop out, or limps along in a weakened state, there’s little chance that the city’s most heated issues — the affordable-housing crisis, the state of the public schools, and controversies surrounding waterfront development and a new Red Sox ballpark — will be discussed in any meaningful way. Davis-Mullen promised that her campaign would jump-start debate, and she’s done so in the past. In the early 1990s, she built a diverse coalition with African-American leaders, including then–city councilor Anthony Crayton, in support of her proposal to bring back neighborhood schools. And in 1996, she courageously voted in favor of domestic-partnership benefits for city employees, a move that cost her crucial support in South Boston, which was then her home base.

Menino may be popular, but that doesn’t mean his policies are immune to criticism. “The shame of it in my mind is that the city needed a good campaign for mayor, as an opportunity for the mayor and the challenger to talk about the important issues,” says Sam Tyler of the Boston Municipal Research Bureau. “That would have been best in a good, competitive political campaign, and I’m not sure we’re going to get that.”

INDEED, DAVIS-MULLEN has suddenly gone from heroic underdog to just another scandal-ridden pol, playing both sides of the issue: after first thanking the Globe for bringing it to her attention that the Department of Revenue didn’t have her taxes, she then insisted vehemently that she had paid them. She also begged off her bar-application misstatements as a “mistake.” Asks Brian Wallace, a candidate for state representative from South Boston, where Davis-Mullen lived until last year: “How many times can she say ‘I made a mistake’ without people thinking this whole [candidacy] is a mistake?”

Jim Spencer, a political consultant who is advising her campaign on a pro bono basis, tried — perhaps overzealously — to defend her image last week. Comparing her to former Nebraska senator Bob Kerrey, who recently admitted that he mistakenly ordered the killing of about 14 unarmed civilians in Vietnam, Spencer notes, “Do you think that Bob Kerrey wouldn’t get re-elected if he were running again in Nebraska? Isn’t killing women and children worse than what Peggy did?” Former city councilor Larry DiCara likens her situation to that of Bill Clinton, whose effectiveness was crippled because he was always on the defensive. But Greg Timilty, who ran unsuccessfully for an at-large council seat in 1999, invoked last year’s failed Republican challenger to Senator Ted Kennedy, who was derailed by an almost comical spate of misdeeds: “She’s had a Jack E. Robinson–type week.”

This isn’t the first time Davis-Mullen has run into trouble. In 1988 and 1990, she was sued for nonpayment of $14,000 in college loans. The Globe reported in 1991, the year she made her first (unsuccessful) bid for city council, that the Department of Revenue claimed she hadn’t filed her 1989 taxes. Her husband declared bankruptcy in 1993 and has faced problems with his legal practice, including a 1996 malpractice lawsuit that was later dismissed. Last fall, an e-mail sent to the Herald sharply criticizing another councilor — purportedly sent by a woman from Dedham — was traced to the computer of Davis-Mullen aide Marty Keogh, who no longer works in City Hall but still volunteers for her campaign; he recently accompanied her to an appearance on the Boston Neighborhood Network’s political program Talk of the Neighborhoods. Last week’s new information was not only damning in its own right; it also gave newspapers license to recount all the gory details of yesteryear in articles like the Herald’s April 26 offering, headlined davis-mullen has problem pa$t. Referring to the Davis-Mullen campaign’s March poll results, Spencer admits, “If you’re Peggy and the poll said a lot of people didn’t know you, this isn’t the first thing you want people to know.”