What's Going on in Deuteronomy?

The story of Joseph and Pharaoh starts out well for the Israelite. But things take a scary turn when he marries an Egyptian woman who dresses like one, too. It's almost like he's becoming subsumed by the Egyptians and is losing his identity as an Israelite. So I have two questions: Am I over reading the text to make these observations? And why am I wrong about Joseph?