Yes, Catherine could have lied. Despite being a pious woman, she was also aware of the politics of the court, and her fragile position as a Queen and woman. We know that she lied about being pregnant and giving birth to a stillborn baby during her marriage to Henry, which I believe was mainly due to fears and undue stress about producing a living heir, but it also demonstrates that in a difficult position, she was not always entirely truthful.
Concerning the issue of her virginity, during her marriage to Arthur, nobody raised any questions or concerns about whether the marriage was consummated. During the wedding night, Arthur's parents, Elizabeth and Henry, and his paternal grandmother, Margaret, were present to “witness” the consummation along with some other representatives from the English court and some Spanish ambassadors. Again, at that time, nobody seemed to have any mishaps about a lack of sexual intercourse, so it seems that everyone agreed Arthur and Catherine had some sort of sexual contact, even if it was only on the wedding night. What we do know with certainty was that after Arthur's death, Catherine was put into seclusion to ensure that she was not carrying his baby, a precaution sometimes performed for paternity's sake. If the marriage was unconsummated, neither Catherine nor her ladies, including her duenna, Dona Elvira Manuel decided this was an unnecessary move and a waste of time for a "virgin princess". Nobody spoke up or even hinted that no sexual intercourse had ever taken place, as the court awaited for signs of a baby bump.
In 1503, Dr. Roderigo Gonzalvo de Puebla wrote in a treaty between Henry VII and Ferdinand and Isabella that the trio would use all their influence in Rome in order for the Pope to draw up a papal dispensation because Arthur and Katherine's marriage was solemnized according to the rituals of the Church, and afterward consummated. When the dispensation was created, it was specifically written to legitimize Henry VIII and Catherine's marriage regardless of whether her first marriage was or was not consummated, but the implication was that it had been.
Apparently, Dr. de Puebla later changed his mind about Arthur and Catherine's marriage being consummated, after he had a talk with Dona Elvira. However, Catherine was not very close to Dona Elvira, who later betrayed her, so it seems rather doubtful that she was actually “in the know” about these private matters. At any rate, save for Dona Elvira, nobody seemed to consider the possibility that Catherine was still a virgin after Arthur's death, and the claim did not come up until there came talks of negotiations to betroth Henry to Catherine. It may be speculated that it was an attempt to bypass any issues with the Church, lest the couple would not receive a papal dispensation.
If Catherine lied about her virginity, I believe it was a matter of self-preservation that forced her into that position. When Catherine was sent to England to marry Arthur, it was with the belief that she would become the next Queen of England. However, after Arthur's death, Henry VII seemed to almost forget about his daughter-in-law, keeping her in near-poverty. I recall reading that she would write letters to her father-in-law, basically begging for alms because she had no money of her own to pay for her meagre upkeep. By the time she married Henry, she was in debt. Her own father was of no help, and as a widow, she was completely dependent upon this English family. In claiming to be a virgin, Catherine may have been trying to present herself in the best light possible for Henry, and not as his brother's “sloppy seconds”, even more so when Henry VIII protested in 1505 that his betrothal to Catherine was incestuous and got engaged to Catherine's niece, Eleanor. In that position, it is rather understandable why she felt the need to claim chastity, especially since decades later, she would have to defend herself and her daughter from illegitimacy.
