If your sellers have unrealistic ideas and you shot them straight they will remember that. When this listing doesn't sell, if you left them on good terms, who do you think they will call to list the house after this listing fails. It will be you! Just be patient! You will get to be the prince on the white horse that comes in and saves the day by listing it correctly and helping them get the sell they so badly need. Good luck!
Some call it karma i call it good business.
We've all been there and it's not fun. Its part of the business, you lose a few listing you should get. Take heart that the agent that has the listing isn't having a fun time either. The universe will repay you, stay positive and be the bigger person, it will pay off soon.
You need to go into the listing presentation with enough documentation so they don't fall for another agent that tells them what they want to hear. What did you really lose, four months of trying to sell an overpriced listing, don't worry about it. If the home expires without selling try talking to them again. Until then let it go and move on, you did what you could for them.