Discuss Illusion Verses Reality in "King Lear"answer in detail
You could also approach illusion and reality as an opportunity to look at characters that are pretending to be something that they are not.
There is Kent, who decides to disguise himself after Lear banishes him from his court, so that he may continue to serve his King. There is Edgar, who becomes Poor Tom out on the heath, to hide himself from his father, whom he supposes wants him dead. This is because Edgar's half-brother, Edmund is, in effect, pretending to be something that he is not -- the heir to their father's title and position.
Each of these people are forsaking one aspect of their lives (reality) in order to pretend to be other than they are (illusion). Of course, there are also the instances when other characters pretend to be other than they are to gain favor and position (Regan and Goneril's speeches about their love and loyalty to Lear in Act I, Scene i).
This one is a rather challenging topic, but not one that is insurmountable. My guess is that you will have to go back to the text a bit and be able to pull out relevant passages or moments where the distinction between illusion and reality are present. This can be found in many locations, such as with discussions between the sisters themselves and with their father, or with the predicament involving Edward and Edmund. I think you might want to spend some time analyzing the storm scene when Lear experiences his full sense of understanding as to who he is and how things have changed in comparison to what he thought he was into what he actually is. This moment might be a moment that you could use quite a bit in your paper in being able to explore the chasm that exists between illusion and reality.