That was my impression back then. I read it, but its because barca and lfc were in talk before wc, and barca was his dream destination afterall, so its a reasonable fear that barca might not go through. Iirc The price in media was 80m before wc, and i think it was so low because he had an agree ment with lfc. The year before he stayed all tho he could have moved to arsenal for a fee between 40-55m pound. Gerrad talked him from it and told him that IF he waits barca would Come for him. So he stayed.
So I dont think anything was knocked off, but im sure barca tried but lfc wouldnt botch. I ALSO remember reading in media that lfc wouldnt go down on the price. And it made sense, because he already was cheap considering his level, he fitted our team like a glove and we needed a Cf desperately. But I also think that lfc didnt botch, ment they would have been fine staying or actually preferred it. They did try to make a PL-winning team and he was a functional socially player in the squad - not a outsider. He was in fact The star of their team. Maybe the Liverpool fan here can provide some infos as well regarding this matter