What is the definition of "You're so far behind, you think you're first"? Should a dictionary entry of this expression be "One is so far behind, one thinks he is first"?
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The expression beings to mind a distance runner who cannot see any of her competitors. She thinks she has left her competitors a long way behind, but really she herself is the one left behind. It's about the comedy of her impending disappointment.
Does that answer your question?
Instead of a distance runner, it could be a person on a race track where the race consists of multiple laps. Though you might not start at the same spot on the track, being far enough behind would look like being in front.
A very good example of what Ed Guiness mentioned is Ryan Hall running a 2:04:58 in the last Boston Marathon and still finishing FOURTH. Here's his interview:
If Ryan Hall wasn't tracking where the other runners were, he could have mistakenly thought that they lost their way (stranger things have happened in major races) and he could have thought that he was first. He actually barely missed a podium finish (3rd place!):
and of course, this says it all: