So far I have " self-deception " and "reluctant to admit that...", but neither of these have quite the same meaning as "". Also, they don't quite work in a phrase where the thing denied is unmentioned, as in "That penguin is ."
Clarification: By "psycho-jargon" I mean to refer to phrases or words derived from psychological jargon. For example, saying "That seal is really OCD" when was is meant instead of "OCD" is merely "overparticular" or "fussy," or saying "That walrus is really anal" when what's meant by "anal" is also something like "fussy" and not anal-retentiveness, from which the word "anal" derives. (Anal! What a word to throw around casually!) In the case of "denial", as with "anal", the term is borrowed from psychoanalysis and so, for me at least, it has always sounded too much like the kind of cheapened pop-psychology lingo you'd hear on a daytime show like Dr. Phil.
Clarification 2: No disrespect to anyone who watches and enjoys Dr. Phil's show/shows.