"So back to my point: if he had them, and if this wasn't the right time to have them ready for use, then what was the right time?"

Well, Saddam must have been pretty certain that he could not actually militarily defeat the US military. So his only chance was to expect us to not even attack or attack later with more forces, or if we attacked then to slow down the attack. He saw more than 1/2 of the American public against the war, he saw an even higher percent of people around the world which were against the war. His dream was to be the ruler of all Arab countries. He saw all of the Arab countries as weak- lousy security systems and a public which was allow to demonstrate on the streets. [The demonstrations allowed were the Anti-american type demonstrations, but with America attacking an Arab country, this meant the street could get pretty heated- with the rulers powerless to stop it.]
So he didn't think the US president would take the risk, nor did he think the Arab leaders *could* take the risk.
With the Gulf war he had his army extended into another country- so he had an "equal" disadvantage as the US military. In Gulf II he could bring his troops into the towns (which was well stocked with food and ammo) and use citizen as sheilds plus have the cover of the buildings plus have a population that didn't speak the same language as the Coalition forces.
Saddam's main hope was dependent on the public opinion of the countries surrounding Iraq (with the main ones being Turkey and Iran) and if things went well, he could probably depend on his only stated ally- the Syria leadership to use it's miltary.
Anyways using chemical weapons would not even have worked well against the Coalition forces even if they weren't wearing chemical suits- the troops were mobile and weren't concentrated- plus if air power had been used against artillery or missiles with chemical warheads they would probably end up killing far more Iraqi troops then Coalition. And finally most importantly by using chemical weapons it would have a very negative public reaction against Iraq (the poor country being oppressed by the US bully). Another related problem is how could Saddam be sure that the US didn't know where his chemical weapons were, and therefore the Coalition may have started the war as it did last time- with a large air campaign- and having as one of it's main targets these chemical weapons. If this was the case then hits with bombs would have revealed that he had chemical weapons. With this in mind he would at least started with these weapons in places in which couldn't be bombed. So ask the question, where could these chemical weapons be put which could not be hit with bunker busters bombs? (You can bet that Saddam would ask himself this question).
Of course there are other possibilities.