Nicht-nativer Versuch:
It is my impression that to a large extent he was being cheated upon, he became consumed with an illusion as to making a judgement of who was on his side and who was not.

"consumed with aN illusion" - the word consumed here would indicate that the person has some sort of illusion/delusion which takes over his whole being, and I don't think it would fit here.

"under the illusion, that..." would work better than "under illusions"

In my suggestions - deluded is more like misled (by others), while delusional means suffering delusions originating from within. I can't decide by your sentence which would be better.

I get the feeling//I believe he is being ((cruelly or other adverb)) betrayed//decieved; that he is fooling himself, that he suffers from illusions and cannot judge realistically ((or: can no longer discern)) who is on his side and who isn't...

A native speaker's attempt:
"to suffer from an illusion" is a standard turn of phrase but also sounds a little funny here. Maybe because these phrases are usually used in a context that directly includes the illusion alluded to; like "he suffered from the illusion that..." (Note: "under" is more usual with "impression" than with "illusion": "I was under the impression that..." --indicating something mistaken, but without the connotation of "unreal" that "illusion" suggests.)

he had the misguided impression ... he was misled in his assumption, so zu sagen

Delusional is more like you are not in touch with reality like most American Idol Contestants (in Österreich "Starmania" und in Deutschland "Deutschland sucht einen Superstar" glaube ich). It started again last week by the way and there were a whole bunch of delusional people who desperately tried to become the "Next American Idol" until Simon would say : "Now thot was oaful, towtal oaful"

<<Ich habe das Gefühl, das er sehr betrogen wurde, einer Illusion erlag, wenn es darum ging, realistisch zu beurteilen, wer ihm gut ist und wer nicht. >>

Another suggestion:
I have the feeling they really cheated him. When it comes right down to judging realistically, he was under an illusion about who was good to him and who wasn't.

That does not sound right to me, but possibly that is something that you hear in Canada ... I am under the assumption that "can" stands for Canada, oder ?

yup Mia - Canada
"under an assumption" - for sure, but also "under an illusion" - not meaning quite the same thing of course.

I'm not very good at explaining the difference, but assumption would not work here, although the difference appears slight when you try to explain it.

I think that if you are under an assumption (I'm sure someone will correct me if I'm wrong), you believe a certain hypothesis to be true. You 'assume' something about a given topic, person, etc.

See the above URL about "Illusions"

"In the thralls of illusion, we believe as true that which is false. Illusion is a genuine mistake whereas dishonesty is deliberate. A calculated fabrication differs from an unintentional mistake."

@ RES Can

Do you have "American Idol" in Canada ? I mean, most of the people who appear on the show are truly delusional, right ?

Greetings to Canada (my favorite travel destination) from the USA

Yes - and I'm kind of hooked on it.

Some of them really do seem delusional. They are under the illusion that they are truly talented, and audition under the assumption that they will make it to the top 10. -:)

Sorry - couldn't resist - although I would probably just say: they audition assuming that ...