Final answer:
The narrator's comment suggests that the story he just told is an exaggeration or fabrication, indicating that he doesn't believe that the events he described actually happened.
Step-by-step explanation:
The narrator's comment, 'to say that's not how it went is a gross understatement,' suggests that the story he just told is an exaggeration or fabrication. He doesn't believe that the events he described actually happened. This contradicts the statement and implies that option 1, option 2, and option 3 are incorrect. Therefore, option 4, 'he believes that he didn't work as hard as he could have to get into his first-choice school,' best explains the narrator's comment.