Wally's comment is _part_ of the diagnosis. Axis II disorders really do involve the inability to discern the dysfunctional behavior in oneself, or recognize the dysfunction. "Inane Personality Disorder"! DSM-V, here we come!
3 yrs 3 mnths into the job and, touch wood, I am yet to come across a colleague like this! I see others have not been so lucky though. Wally's single comment packs in more punch than all of Dilbert's diagnosis!