In addition to the drug thing, Casso told the judge in his letter that he had met with Gravano to discuss an attack on Al Sharpton on a day Gravano was very clearly in jail. He was useless as a cooperating witness anyways, but that destroyed him.
As far as Gravano's credibility, it was a major point of Gotti and Locascio's 1993 appeal (not due to Casso, but due to other crimes indicated by Alphonse D'Arco), in which the appellate court reaffirmed the original ruling. They couldn't have made a second appeal on the same point of law. The jury already knew that he had murdered 19 people. they already knew he had pleaded guilty for leniency, and yet they still chose to believe him.