On September 15, 2004, a woman locked herself inside the bathroom of Sherwood's Washington, D.C. apartment, and called 911 to report she was assaulted. When police arrived, the woman, Cynthia Ore, accused Sherwood of choking her, though he maintained he was only giving her a backrub. No charges were filed because both Sherwood and Ore refused to provide any details.
The details of that incident went unnoticed until 2005, when Veronica Hannevig, who ran against Sherwood on the Constitution Party ticket in 2004, distributed a copy of the police report to several newspapers and television stations. Sherwood initially contended that Ore was merely a "casual acquaintance".  He eventually admitted he had a five-year extramarital affair with Ore, but denied abusing her. 
Ore later filed a $5.5 million lawsuit against Sherwood, accusing him of repeatedly assaulting her during their relationship.  On November 8, 2005, Sherwood and Ore ended the lawsuit by reaching a settlement, the terms of which were not released.
The Ore incident damaged Sherwood’s standing with some Republicans. In April 2006, Martha Rainville, a Republican running for the U.S. House seat in Vermont, announced that she would return a campaign contribution from Sherwood’s political action committee. She cited her belief in "strong family values".  But Sherwood received strong support from Republican leaders for the 2006 Republican primary in his district