'Party Down South' -- Southern Rebellion Ends in Surrender!

The South will apparently rise again -- "Party Down South" is coming back for Season 2 now that the cast is waving the white flag of surrender in its pay dispute ... TMZ has learned.

We broke the story ... the "PDS" regulars were stonewalling ... refusing to work unless CMT paid them $7,500 an episode -- a hefty 1,400% pay raise from the paltry 500 bucks for Season 1.

But sources close to the show tell us ... CMT refused to budge -- even though "PDS" is the network's most successful show EVER.

We're told, the network is being hard-ass ... saying the cast signed a contract through season 2, so that's the way it is ... the network's way or the highway.

BUT ... CMT dangled a carrot, promising bigger paychecks in Season 3.