I sympathize with you. The story can be a little short on clear details, but it all generally fits together once you step back a bit. It's also worth noting that much of the story is left open to interpretation.
With that said, here's the best description of what happened: Walker lost his mind after the white phosphorus strike. Everything that happened before that was real (to my knowledge), but after that point Walker's mind began to alter events as an attempt to cope with what happened. As a result, he is bewildered by his team's increasingly extreme reactions to his actions until the end of the game.
Colonel Konrad, as a hallucination resulting from Walker's deteriorating mental state, correctly claimed that Walker was making himself out to be a hero, when in fact he had committed various immoral acts. Walker was losing touch with reality, and used Konrad as a figurehead for his guilt to avoid accepting his own moral weakness. However, he was not, as you put it, "the actual problem of it" - rather, he simply influenced Dubai's further descent into chaos through his misguided attempts at heroism.
What Walker does in the game actually happens - the big twist is that Walker is perceiving what happens differently from everyone else. For instance, he didn't realize that the radio was broken, or that the bodies hanging from the overpass were already dead - his mind had shut out anything implicating him as having lost his sanity. He also wasn't capable of realizing the brutal nature of his team's devastation of the Radioman's tower, or of various soldiers' deaths, because he subconsciously couldn't acknowledge his guilty conscience.
If you need any more details, please contact me. I'll do what I can to help, though what I've said is about as straight-forward of an answer as you can find.