Thanks for the comment. The fender is actually cut completely through because I had a friction drive on it previously. But even so, you can't see the 2 inch gap under there unless looking at it from your knees.
Yes, it can be picked very easily.
There was something of a scandal some time back, when it became publicly known that an ordinary bic pen could open most barrel-key locks. Most-all the big bike forums online had sticky threads about it. There's videos online showing people doing it; depending on how much the lock has been used, a pen can open it almost as fast as the key can.
Google search: http://www.google.com/search?hl=en&q=kryptonite+locks+bic+pen&btnG=Google+Search
There's a sticky thread on bikeforums.net, in the "general cycling discussion" forum: http://www.bikeforums.net/
Kryptonite has switched to a new style of flat key. If you have an original Kryptonite with a barrel lock and tubular keys, there was an exchange program that might still be in effect, or they might give you partial credit for whatever you trade in.
All regular barrel locks are susceptible to this hack, except for the MasterLock Street Cuffs. Although what these have looks like a barrel lock, it is technically different enough that the pen trick will not work.
What I found most interesting about the whole tubular lock/bic pen event was that a couple years before this happened, the vending machine locks on the vending machines where I work were changed from barrel locks (which they had all used for a number of years) to a newer different type. This type has a circular face that fits flush with the lock's face, and a series of pin holes in a circle.
.....My bet would be that the reason that these locks all got changed was that vending machine industry had known for some time that people had found a way to get barrel locks open quickly and easily without any visible damage. They may not have known how it was being done, but I'd bet they certainly knew it was happening.
(-I cannot figure out what this newer type of lock is named, so I'll have to go snap a picture of it and ask around-).