It is a fact that I care, we agree.

Perhaps the issue is that I believe I should not care -- that if I was more rational, I would not care.

That my values are based on a misunderstanding of reality, just as the title of this post.

In particular, my values seem to be pinned on ideas that are not true -- that states of the universe matter, objectively rather than just subjectively, and that I exist forever/always.

This "pinning" doesn't seem to be that critical -- life goes on, and I eat a turkey sandwich when I get hungry. But it seems unfortunate that I should understand cerebrally (to the extent that I am capable) that my values are based on an illusion, but that my biology demands that I keep on as though my values were based on something real. To be very dramatic, it is like some concept of my 'self' is trapped in this non-nonsensical machine that keeps on eating and enjoying and caring like Sisyphus.

Put this way, it just sounds like a disconnect in the way our hardware and software evolved -- my brain has evolved to think about how to satisfying certain goals supplied by biology, which often includes the meta-problem of prioritizing and evaluating these goals. The biology doesn't care if the answer returned is 'mu' in the recursion, and furthermore doesn't care if I'm at a step in this evolution where checking-out of the simulation-I'm-in seems just as reasonable an answer as any other course of action.

Fortunately, my organism just ignores those nihilistic opines. (Perhaps this ignoring also evolved, socially or more fundamentally in the hardware, as well.) I say fortunately, because I have other goals besides Tarski, or finding resolutions to these value conundrums.