MOSFET Differential Amplifier voltages via PSpice and by hand
You didn't specify the W/L relationship in the model.
If i calculate it with W/L = 1, it gives the same value as the simulator.

\$ V_{gs} = \sqrt{\frac{2I_D}{K_p\frac{W}{L}(1+V_{ds}\lambda)}} + V_{th} = \sqrt{\frac{2\cdot 7uA}{140uA/V^2\cdot\frac{1}{1}\cdot(1+1V\cdot0.1)}} + 0.5V = 801.5mV \$

And no, you can't assume that the source node is at 0V, it depends on how you drive the inputs. Also, in the real world there is no ideal current sources, so the source can never be 0V in that case.