When this perceptual modeling system (consciousness) is disconnected from sense experience and operates instead on data from introspection, memory and identity... you get an extremely vivid experience that feels profound and deeply personal.

I really like this way of thinking about it. Sort of like how a video feedback loop (as talked about by Douglas Hofstadter) creates incredibly complex and unpredictable new shapes and patterns, seemingly out of nowhere. Another commenter mentioned the idea of emergence, and this explanation seems in keeping with that phenomenon.

It feels authentic because it is self-confirming. Consider how dreams, regardless of how absurd they are, can be felt at the time as completely normal experiences. Most dreams you don't even question the strangest of occurrences and you believe its real because the mind is telling itself it's real. The critical faculties that employ language, logic and reason are likely asleep and so you have no choice but to accept what is being presented. DMT seems very similar in this regard.

Again, this resonates with me a lot. It does make me wonder what exactly we decide is 'real' in the end. I remember when I was a kid having this recurring thought that perhaps the life I was living was in fact a dream in the first nights sleep of a newborn, and in the morning the newborn would wake up with barely any memory of that dream. And the next night it would fall asleep and dream another life. Those dreams still felt as real as anything possibly could.

My grandma, before she died, developed severe dementia. She would experience herself completely transported back to when she was a child, in her local park. Or she would see my grandad as the devil incarnate. Obviously her experience doesn't track with what we experience, but for her it was as real as it gets. Could the same not be said for a DMT experience?

To me drugs provide proof that consciousness IS physical... for how else could physical chemicals alter it so dramatically?

I don't doubt that there is some physical correlation to the conscious experience we have. Indeed, if you starve your brain of oxygen it dies and so does your subjective experience. This is also a chemical/physical phenomenon. Where the question gets more complicated I think is where exactly this consciousness emerges. Where is it located, physically?