Spaced Ranger said:
“Coppola insists that THX was barely cut, but to Lucas, they might as well have chopped up the entire movie into little pieces.”
Our evidence and this quote seals the deal for me. THX was barely altered by the producers and GL made a significantly bigger deal out of it than was necessary.
Perhaps he continued with this fiction (and dialed it up!) when the film bombed since it shifts blame from him to the producers.