A PIPER PLT LOSES POSITIONAL AWARENESS WHICH CONFUSES TWR UNTIL THE TWR REALIZED WHERE THE ACFT WAS.

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I WAS ON EXTENDED R DOWNWIND FOR RWY 23 AT LAF. I ASKED TWR TO CALL MY BASE SINCE I COULD NOT FIND THE TFC I WAS TO FOLLOW ON EXTENDED L DOWNWIND. TWR THEN TOLD ME TO CIRCLE TO THE W AND ENTER R DOWNWIND FOR RWY 23. DUE TO THE LARGE VOLUME OF TFC AROUND ME; THAT I WAS WORRIED ABOUT STAYING AWAY FROM; AND NOT FULLY UNDERSTANDING WHAT TWR WANTED ME TO DO; I ASSUMED THAT I WAS TO CIRCLE ON THAT SIDE OF THE ARPT AND THEN GO FOR THE R DOWNWIND ENTRY. I THEN ASSUMED I WAS TO THE W WHEN I REALLY MOVED TO ABOUT 5 MI ENE TO CIRCLE. I THEN STARTED TO GO N; SO I COULD GO OUTSIDE THE PATTERN TO RE-ENTER AT THE R DOWNWIND AND ASKED TWR FOR INSTRUCTIONS AGAIN. AT THIS TIME THEY WANTED ME TO ENTER A L DOWNWIND SO I TURNED AND HEADED S; MOVING CLOSER TO THE ARPT AND AVOIDING TFC. ALL THIS TIME; I WAS MISTAKENLY RPTING TO THE W WHEN I WAS REALLY TO THE E. TWR AGAIN CHANGED INSTRUCTIONS AND TOLD ME TO ENTER R DOWNWIND FOR RWY 23. I THEN TURNED TO THE N AND WAS NOW ABOUT 3.5 NM ENE WHEN TWR ASKED WHO WAS MANEUVERING TO THE NE. AT THIS TIME; I REALIZED MY MISTAKE IN RPTING AND IMMEDIATELY TOLD THEM. THEY THOUGHT I WAS REMAINING OUTSIDE THEIR AIRSPACE SINCE PEOPLE WERE HAVING A HARD TIME GETTING ON THE FREQ. I WAS THEN TOLD TO FOLLOW TFC WHICH I HAD RPTED IN SIGHT AND SAFELY LANDED WITH NO FURTHER CONFUSION.