From Powell gives bleak assessment of Iraq security problems, by Guy Dinmore in Washington for the Financial Times, January 13 2005:

According to Chas Freeman, former US ambassador to Saudi Arabia and head of the independent Middle East Policy Council, Mr Bush recently asked Mr Powell for his view on the progress of the war. "We're losing," Mr Powell was quoted as saying. Mr Freeman said Mr Bush then asked the secretary of state to leave.

Or, directly from Mr. Freeman's mouth, by way of the transcript of his appearance at the recent Capitol Hill Conference Series on U.S. Middle East Policy, Iraq, Afghanistan, and the War on "Terror", January 11, 2005:

Anyway, the other day I understand that someone went into the Oval Office - someone known to everybody here, a rather senior person who is on his way out of the administration - and was asked by the president what was going on in Iraq, and said, with his characteristic bluntness, we're losing - and was asked to leave the office forthwith and not continue the discussion.

So there's a question about what is going on in Iraq, and perhaps the competition between reality-based analysis, much disparaged in Washington these days, and hallucinatory optimism, which is the alternative.