Option C is the correct answer because the phrase 'to be lost in the clouds' means to be confused or to be uncomfortable.
Options A, B, D and E are incorrect because these are not the correct meanings of the given phrase. 'Misguided' means having or showing faulty judgement or reasoning, 'lunacy' means crazy, 'disappear' temporarily means to vanish for a short period of time and 'to disappear permanently' means to vanish forever.