It is clear that Lloyd could not read the newspaper in the hotel suite, but in the scene where they stop for petrol, and Lloyd is in the toilet, he can read the message scrawled on the wall by Sea-Bass.
But then, hey! The film is so funny anyway, who cares about a few slip-ups?!
Who said he couldn't read??? In the movie, he was actually just having a tough time pronouncing the words. Some people know what a word means, but have trouble saying it outloud/pronouncing it. And clearly he didn't need to read outloud when he was in the bathroom stall.
Yes. Reading out loud is different than know what "manly love" looks like... I'm assuming even with his, er, mental slowness, he understood that he needed to get his a** out of there.
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