Retarded is really the best word you could come up with?

Most mentally retarded people I've met are quite aware that they're significantly less smart than the average person, and have internalized it quite well. Have you ever seen an 8-year-old burst into tears because the rest of his class can read, but he can't, no matter how hard he tries?

Unfortunately, self-delusion generally isn't one of the ways mental retardation presents.