These are some comments of mine from the Logic Matters blog.
The trilemma seems to be pointing to two sets of facts or, at least apparent facts. On the one hand we have the moral genius of Jesus, the kind of moral genius that produces things like the Parable of the Good Samaritan, and on the other hand we have the claim, implicit and explicit through the Gospels, to be God. The discussion thus far has been presupposing that both of these set of facts are real facts, but want to say that they are psychologically compossible in Jesus. I was trying to show with my student story that we have good reason to suppose that it is hard to believe that this combination could exist in the real world, and that we would certainly not expect someone who was deluded into believing oneself to be God could even be good and wise enough to be a fair grader and a good classroom teacher, much less a moral genius of the caliber of Jesus. So I was trying to support your side of this discussion, Mike. If you accept the "local delusion" theory suggested by Smith here and by John Beversluis in his revised book, then the students should be reassured by the dean. But the dean's reply doesn't seem reassuring to me at all. Of course here probabilities have to enter the picture--if you have priors according to which any naturalistic account is preferable to any supernaturalist account, then of course the LLL argument isn't going to carry any weight. Or you can say that the facts I alluded to above are only apparent facts but not facts. But what seems to me to be implausible is to accept these two sets of facts as facts and somehow fail to see a serious dissonance that requires some explaining, to say the least. The argument is not bad, or stupid, or idiotic, in my view. The existence of possible alternatives doesn't mean that those alternatives are plausible.