The thing that really messes things up for me are the moments in Babbidi's ship... Where this character who's supposedly "dimensions above" piccolo in strength, is absolutely astonished and baffled by base saiyan power... I used to think that what he was really worried about in the ship, was the possibility of babbidi's minions using strange, powerful magic. But that excuse only goes so far...
See this scene for instance
There's no excuse here, kaioshin is shitting his pants at base Vegeta's playful blast... I mean... Piccolo, if he ever mistakenly assumed kaioshin was "dimensions apart" from him, would probably laugh at himself after seeing this reaction.
Another scene that bothers me is this:
He believes that everyone, including himself, needs to gang up on Yokon... Now this could be excused by the "scary, unpredictable magic" excuse, but this is a fighter/monster that he actually knows of... He knows his power... Soooooo... Yeah...
The only way to honestly accept Kaioshin > Piccolo is to assume that the base saiyans are VASTLY more powerful than Piccolo, which makes no sense, not only because of BoG, but because of the fact that they all seem to to still be around cell games Gohan level of strength. There's no doubt in anyones mind that ssj Gohan is stronger than Piccolo, but base gohan being in another dimension from piccolo?
Piccolo was one of the only people to actually stand a chance against Cell jr.s and this was before he spent 7 years doing whatever he did that gave him the confidence to bother joining the budakai.
This is a guy that, in 3 years, closed the gap between 2nd form frieza level to stronger than ssj namek goku level, with solo training alone.
Given what's seen, I REALLY have a hard time believing that Piccolo's statement was anything other than a statement of respect/faulty inference, based on assumptions made about the kaioshin race.