'Party Down South' -- Money War Ain't Over ... Cast Threatening Strike

12:30 PM PT -- It's getting real ... a source connected with the show tells TMZ, "It would be a shame for them to walk away from their big break. Fortunately for the viewers, there are plenty of kids in the South."

The cast of CMT's "Party Down South" is NOT giving up on its war for fatter paychecks -- despite what the network is claiming -- in fact, they've now banded together ... and are threatening to derail the entire show if their money demands aren't met.

As we reported, show reps had claimed the salary war was over -- telling us the cast had agreed to continue with Season 2 production per their original contract ... at a rate roughly equal to their Season 1 rate of $500 per episode.

The cast wanted a raise to $7,500 each per episode -- but CMT refused to budge ... and reps for the show told us the cast had given up its fight.

But now we've learned ... that's not true -- lawyers representing the cast just sent a letter to CMT and 495 Productions, claiming the contracts initially signed by the cast weren't fair.

The lawyers claim the cast signed extremely unfair contracts without lawyer help, and they want new contracts drawn up asap. Among their demands ... way more money.