I have a theory...
We have info that in early 1969 the commanders got together and spoke with Kerry about "time to get out of here" and they probably bribed him to leave by stating that they would authorize his medals and let him go with his 3 purple hearts and other medals. They saw him as a loose cannon, someone not to be trusted, someone who did not take orders well and wasn't a "team player".
It stands to reason that someone so privately humiliated by his officers and peers would sooner or later respond to the festering sores and go counter to the authoritative position.
That is where his out in left field comments about atrocities and being in Cambodia might come from - he was punishing the very military establishment that didn't "appreciate" him. It was the old "I'll show YOU" syndrome. He found a way to gain recognition and fame while also striking out against the establishment that shamed him so.
And, as many persons caught up in such energy-intensive paranoic defenses, he started believing what he was saying, believing that he was right and everyone else was wrong.
Dang, it is a great scenario for a movie...
I think he believes his own lies, but I'm not sure if he had/has the capacity to recognize that he was being gotten rid of after his quick 4 months. You may be right. But he has such a tin ear for how he comes across. Would a rational person go as far as he did into the hippy anti-war movement who had real aspirations for political office at a future date.
He seemed to go from one photo-op to the next - his entire life.