I think for some of us it goes beyond the foreshortening effect.
I have coined a term "penarexia", or "penorexia"
Just like extremely skinny women with anorexia still view themselves as fat, men with extremely large penises can still look down and see a tiny willy.
It is a mental disorder. I truly believe this happens.
I have a rather large unit, and I have seen dildos that I know for a fact are smaller than me (both by measurements, and direct comparison of holding the toy to my member) and even though they are smaller than me, they look huge while I look small.
I have realized that the toys actually are huge, and that my brain is seeing them accurately, but when looking at myself there is some type of translation error in my brain and I look small to myself.
This seems to be a common phenomena in men on this site, and likely outside of this site too.