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Dorothy and the Rear Admiral.
A bubbling pot of thew.
The moon illusion disappears (for most people) when they bend down and look at the moon between their legs. [Is it merely coincidence that this is the position used for "mooning"? Disregard that.] Or, if so inclined, one can view the moon by hanging from one's heels! At least two hypotheses have been proposed to account for this. (1) Familiar objects in the field of view may become useless as distance references because of their unfamiliar appearance when viewed upside-down. (2) The illusion may have something to do with our inner-ear's balance mechanism that tells us whether the head is upright or upside-down.
This is an old test of one explanation for the moon illusion. Some
researchers have proposed that the moon illusion is affected by the relation of the angle of the eyes relative to the head relative to the moon. So, by changing this relationship the illusion can be changed. However, most perceptual researchers don't believe this theory.
The most convincing explanation is that the moon on the horizon is perceived by our brain to be further away than it is when higher in the sky. Since the moon is actually the same size on our retina, the brain figures it must be bigger and we see it as bigger. The horizon acts as cues to depth. So, maybe, by putting our heads upside down we are eliminating normal cues to depth perception.
The explanation(s) of the moon illusion, however, is far from settled. Put "moon illusion" into google and you will find an amazing number of explanations and criticisms of other explanations.