We report a large thermodynamic effect of solvent buffer on the standard binding free energy for a large hydrophobic ligand and show that a realistic comparison with the experimental binding affinity requires correctly accounting for the solvent reference state and ligand reorganization. We focus on lenacapavir (LEN; MW ≈ 1 kDa), an HIV-1 capsid inhibitor with very low aqueous solubility. Using several absolute binding free energy (ABFE) protocols including double-decoupling method (DDM), potential-of-mean-force (PMF) approaches, and the Alchemical Transfer Method (ATM), we obtained standard binding free energy values in neat water of ΔGbind0 = -26.4 to -30.0 kcal/mol for LEN binding to the HIV-1 capsid CA dimer, much stronger than the SPR-derived affinity measured in 5% DMSO buffer (≈-13.4 kcal/mol). We analyze the discrepancy and identify two dominant contributors to the calculated overbinding. (i) Solvent reference state: A thermodynamic cycle analysis and solvation free energy calculations reveal that the 5% DMSO buffer stabilizes the free ligand by ∼-4 kcal/mol relative to neat water. Additionally, we propose that the enrichment of the hydrophobic cosolvent in the apo binding pocket makes it more energetically costly to displace DMSO upon ligand binding. (ii) Ligand reorganization: incomplete treatment of LEN's internal conformational reorganization in the ABFE protocols leads to overbinding; a DDM variant with explicit ligand reorganization reduces the overestimate by ∼6 kcal/mol. Together, considerations of these effects significantly reduce the discrepancy between the ABFE calculations and experiments. Our results suggest that for large, hydrophobic ligands, quantitative agreement between ABFEs and experiments requires (a) reporting ΔGbind0 in the appropriate assay buffer (not simply in water) and (b) explicit treatment of ligand reorganization.