I feel like the opening post maybe missed the number one most common form of unreliable narration:
Somebody is telling their story of how things happened in a way that's skewed by their worldview, or omits facts to make them look better.
This is famously the premise of the classic Japanese short story and its probably more famous movie adaptation, Rashomon. In Rashomon, a group of people all retell the same event, but each of them tells it a bit differently, either because they missed information or contextualised it differently, focused on different things, or wanted to tell the story in a way that makes them look innocent or more heroic.
Frankenstein, by Mary Shelly, uses a similar technique, where a large chunk of the narrative is told by Victor Frankenstein, whose view of the monster he created is that it's a grotesque, horrible creature and that he was justified in abandoning it, and making that sound sympathetic...only to then let the Monster tell his side of the story, where he meant absolutely no harm and had no idea what was happening or why his creator had run away from him. Victor was just thinking the worst of the monster based on nothing at all, but told the story in a biased way that made it sound like he acted in a really reasonable way in the circumstances.
You can be perfectly sane and have a perfectly good memory of what happened and still skew the way you tell a story in your favour just by it being flavoured by how you felt about it, or your prejudices or what context you had.