Yes - I'm inspired by your story, too! I'm 5'6 and have a goal weight of 140, but I expect that may change.
I do think that distortion goes both ways. I wouldn't have gotten this overweight if I didn't look down at my body and think "OK."
I was telling DH the other day that when I'm seated and look down, all I see is boobs and legs, and my legs are skinny, so it's like my tummy doesn't exist. If I actually move a breast out of the way, "suddenly" I see how big my love handles are. Ha ha.
I've been to the other extreme, too, and I know what you mean. I was about 120# or less when I was in college, and I was convinced that I was fat and needed to lose weight. I actually went through months of eating nothing but lettuce with fat free dressing on it and the occasional plain baked potato. One day, a friend of mine was looking at my driver's license and said, "You LIED about your weight on here." I immediately turned bright red and said, "It was correct when I got it!" and he replied, "Well, you're not 120 lbs. now. What are you - 100 lbs. soaking wet?" He thought I'd lied UP about my weight, not down. That's how distorted our perceptions of ourselves can get - I thought he was calling me fat when he was doing the opposite.
I have read (not experienced!) that after a big loss, sometimes it takes a year or so for you to see your body as it really is and not how it used to be. Someone posted that on this board recently.
I agree that clothing size and measurements are the best guidelines. I think you have a healthy attitude in knowing that you are not actually the person you see in the mirror, and that you don't need to lose any more weight.
Hang in there, and your brain will catch up with your body.