"extra embelishments until the memory fits the degree of emotion they feel".
I think that makes a lot of sense, hugshelp. I also think some people project irrational thoughts they had themselves at the time onto another person w/o realizing it. For example, Smileless, at the time of that incident, DS may have been thinking something like, "Wow, Dad's so mad, I bet he wishes I'd never been born!" Now perhaps, he's remembering his own (foolish) thoughts as if Mr. S said them.
Also, I know what you mean about "transference," Smileless. In the past, my own DD occasionally transferred something a friend experienced onto herself, talking/acting as if she had been through it, and I had to remind her, "No, that was your friend who that happened to/your friend's mom who did that, not you/me." Fortunately, she always saw, right away, that I was correct, and this hasn't happened again for years. I'm sorry ES that's not the case w/ ES.