I've read of something like this affecting pilots. Despite their instruments saying one thing, they become convinced that they are wrong and go off in a different direction. Of course, the instruments were right and trouble ensues. Some people think this is what might have happened to the famous lost flight of Navy planes in Florida after WWII and usually blamed on the "Bermuda Triangle."

I think it is a topic worthy of study. Why does it happen? How many people who got lost and perished while hiking etc. became totally convinced that they were walking in the right direction (e.g. East) when they were actually walking west?

Moral: have, use and trust your compass.