For the weather geeks in our midst (welcome! who's Doppler is bigger anyway?) this is the technical discussion from SPC which sheds more light on why they're issuing a watch, which means "watch out", conditions are ripe for isolated severe storms. Heavy weather tends to form along the northern edge, the northern periphery of hot airmasses, where moisture can pool, low-level jet stream winds can focus on leftover boundaries and small differences in instability "lapse rates" can ignite vast columns of warm, rapidly rising air - cumulonimbus. On occasion these storms can continue, hour after hour, warm updrafts "protected" by a highly sheared environment. This is when storms can spawn baseball size hail and updrafts can become extreme enough to form tornadoes.
This seems like more of a flooding/hail/lightning event to me overnight, but I wouldn't want to rule out an isolated tornado, especially across Iowa, deeper in the warm, unstable air.
MESOSCALE DISCUSSION 1817
NWS STORM PREDICTION CENTER NORMAN OK
0858 PM CDT FRI AUG 07 2009
AREAS AFFECTED...PORTIONS OF CNTRL/NRN IA INTO SRN MN
CONCERNING...SEVERE POTENTIAL...WATCH LIKELY
VALID 080158Z - 080330Z
THE THREAT FOR SEVERE STORMS CAPABLE OF MAINLY LARGE HAIL AND
DAMAGING WINDS IS EXPECTED TO INCREASE THROUGH 03Z. CONVECTIVE
TRENDS ARE BEING MONITORED FOR A WW.
00Z OMA SOUNDING SAMPLED A MOIST AND STRONGLY UNSTABLE /MLCAPE OF
3000-4000 J PER KG/ AIR MASS IN PLACE TO THE S/SW OF WARM FRONT
WHICH EXTENDED FROM LOW PRESSURE OVER CNTRL SD SEWD DIAGONALLY
THROUGH IA. FORCING FOR ASCENT ASSOCIATED WITH LOW AMPLITUDE
IMPULSE MOVING THROUGH ERN NEB APPEARS TO BE WEAKENING THE REMAINING
CAP SUCH THAT EARLY TSTM DEVELOPMENT IS OCCURRING AS OF 0145Z OVER
MONONA AND CRAWFORD COUNTIES IN WRN IA. THESE STORMS WILL LIKELY
TRY AND BECOME SURFACE-BASED GIVEN THEIR LOCATION TO SURFACE WARM
FRONT. BASED ON THE DEGREE OF INSTABILITY AND MODESTLY STRONG
VERTICAL SHEAR THROUGH THE LOWEST 3-4 KM AGL...SETUP WILL BE
FAVORABLE FOR THE EVOLUTION OF SUPERCELLS CAPABLE OF MAINLY LARGE
HAIL AND DAMAGING WINDS. SOME THREAT FOR TORNADOES WILL EXIST WITH
ANY SURFACE-BASED STORMS THAT MOVE EWD AND INTERACT WITH WARM
FRONT...NAMELY AS LLJ INTENSIFIES TO 50-55 KT.
ADDITIONAL STORMS WILL BECOME INCREASINGLY LIKELY TO THE N OF WARM
FRONT FROM N-CNTRL NERN IA INTO SRN MN ALONG NOSE OF STRENGTHENING
LLJ. HERE TOO...ENVIRONMENT WILL BE FAVORABLE FOR SUPERCELLS
CAPABLE OF LARGE HAIL AND PERHAPS LOCALLY DAMAGING WIND GUSTS.