Answer:
A. Although Billy has found peace internally, he is still at war in World War 2 externally.
Step-by-step explanation:
Billy is at peace. Billy probably suffers from both disillusionment from the war and delusions. While the delusions may outweigh his disillusionment in terms of his mental well-being, they perhaps allow him to function, at least part of the time, in the normal working world.