of the top of my head, (before i read this thread) i would have said confabulation was a tale with a germ of the truth, but with a great deal of exageration.

a tale of exploits, like catching the great fish--which of course, alas, gets away in the end, so you have no proof of the fight you had with this amazing animal...

or other tale tales of this type..

so not just the idle chatter of inselpeter, but closer to grapho's defination of To fill in gaps in one's memory with fabrications that one believes to be fact.--but i would disagree about the that one believes to be fact-- i don't think they really belive the are telling facts, but rather just enhancing the story.

one TV show had an episode about a fabled writer, who had been stabbed (aledgedly) by his former spouse. the waitress told the detectives, in reality, the wife had thrown a spoon, but each time the writer retold the story, the episode had gotten more violent, and more harmfull. she commented in few years, the writer would be claiming to have died from the stabs wounds inflicted by his (now, former) wife. we all have told talls, (that get enhanced with time) of our youthful exploits... these are often confabulations