Is a low difficulty insecure? Please ignore the connection between difficulty &amp; creation rates for the purposes of this question.

Can a difficulty be set so low that the security of transactions is compromised?  In other words, if a difficulty is set too low, can malicious miners forge transactions?

If so, what number is "too low", and how is it determined?
A low difficulty is only insecure if the malicious miners have a combined hash power much greater than the difficulty level.  The difficulty level is adjusted up or down every 2 weeks so that a new block continues to be found approximately every 10 minutes.  So, to forge transactions, a large percentage of the current miners would need to stop mining in order to get the difficulty level to drop.  Then the malicious miners could jump in and create bogus transactions assuming they controlled enough hash power to make their blockchain the accepted one.