This brings back memories! I was such a liar! But I didn't always mean to lie. I was simply extending the imaginary. For example, I told everyone in kindergarten that I had a kangaroo at home. I think that when I told the story, it was merely imaginative play but I kept it going. Regrettably, that set me up to be seen as a liar throughout my school years. I also became a petty thief (school supplies, mostly), and I think it was all an extensive of whatever was different about me and my understanding of how the world works.

I don't know what would have worked for me then. Eventually, I stopped lying because the consequences with my peers became too much to handle. I spent so much time being afraid of getting caught in a lie that I quit.

I like your ideas Zen and CCN.