"By the way, how'd the Brit ruling class come to understand that the empire was cooked?"
It's a big question, and it comes in various stages.
The zenith of Empire proper was the Edwardian era, when you get a lot of presentiments of collapse. Social Darwinism was very popular as a bullish assertion of racial aristocracy was attractive to an elite that sensed its political control was at its height/most stretched. At the same time you got a lot of decadence - Oscar Wilde, Aubrey Beardsley and the Yellow Book, Aleister Crowley etc.
Then during the Boer War, a lot of non-conformist elite types (Bertrand Russell, G.E. Moore) peeled off and supported Boer claims. There was a certain amount of upper class sympathy for the Irish rebels, too, and for a while Sinn Feiners were as popular in some quarters as the Black Panthers at Leonard Bernstein's. Constance Markiewicz, Erskine Childers and Roger Casement followed the logic of this flirtation into the Republican camp.
At the same time the High Tory reaction was extreme, exemplified by Bonar Law and Rosebery's bullish defence of Empire. And that was the mainstream position.
At the same time a more liberal attitude emerged among the deracinated petit bourgeois of the Bloomsbury set, like Leonard Woolf, Keynes etc. and this was reflected somewhat in the Commonwealth Office surveys edited by Arnold Toynbee which effected an aristocratic disdain for the immediate problems, and a preference for the broad sweep of history whose meaning was, roughly, 'no doubt in time our Empire will pass away, but in the meantime, we owe it to civilised values to avoid too much bloodshed or rapid change'.
The real transformation was disguised by the ?expedient? of the Second World War under the cover of which titanic struggle, Britain managed to disguise its act of handing over world hegemony to the US. Institutional inertia meant that Britain still contributed a junior role in policing for some time, disguising the extent of the collapse. But UK leaders still had to suffer a fifty year (maybe still suffer) period of decline, where each position is a retreat from the preceding. Sometimes they baulked at that, as PM Eden did during Suez and Tony Blair did in his second term militarism, sometimes they embraced the change towards a normal power, as the first term, pro-Europe Blair did.