Maximum Difficulty

What is the maximum difficulty on a given task? Can modifiers (such as wounds, or conditions) increase a difficulty beyond 5?

Difficulty does not increase past 5.

If the Difficulty wound increase beyond 5, the GM could also say that the task is impossible.

I don’t think it can, however sometimes you have to get some Momentum that makes it necessary to have more than 5 successes.
In particular, there are some spells with quite expensive momentum spends (for instance Possession in Astral Wanderings, corebook). On the other hand, Sorcery allows bonus momentum to drastically increase with votaries and human sacrifice (see Book of Skelos), so one character doesn’t have to make 5 by oneself.
In Conan the Pirate, there is the Cheiroballista with availability 7. I think that it is intended to be decreased by talents or finding contacts.
Finally, note that struggles often have a low base difficulty but if your opponent got 5 extra successes, well you have to get at least as many.

Apart from those cases, if you have to adjudicate an action with several increases in difficulty, the corebook seems to indicate that you should leave it at D5, which already demands that your players have ways to throw extra dice. Of course, some actions will be flat-out refused (finding an academic library about sorcery in Cimmeria, creating a Yithian electric weapon with Hyborian Age technology, etc).