What is sanity? It's cliche yes, but I have decided to include a few definitions to start my post.
Dictionary.com defines "sane" and "insane" in the following manner:

sane, adj
1. free from mental derangement; having a sound, healthy mind.
2. having or showing reason, sound judgment, or good sense.

insane, adj
1. not sane; not of sound mind; mentally deranged.
2. of, pertaining to, or characteristic of a person who is mentally deranged.
3. utterly senseless.

With that said, I was recently charged with watching over a member of my shop who had gone "insane". I was given the 10pm to 4am shift because I was the lowest ranking member responsible enough to be charged with watching him. The first night was really my only opportunity to talk with him, so most of what I say pertains to that night.
During my entire visit with this Airman, he did not sleep and based on reports by the others charged with watching him, he might have slept an hour or so in any given day. There were a few times when he laid down, but he would listen to his iPod when he laid down and within minutes he would be back out of bed dancing to his music. Then he would want to talk again about, whatever it was that was in his head at that moment.
During one of his speeches, he pulled both of the shift nurses into his room with myself. He said, "I'm an angel. I'm the right friggen hand of God and Jesus is my brother. I was formed out of the blood that fell to the ground when he was speared while on the cross. My real name is Jaiju, and I'm actually 597 years old. I know my body isn't that old, I'm only 22 years old, but really I'm 597. This isn't my first time coming to this earth, but I wanted to come back to help America, because the only countries in the world that walk the path of God are America and Israel. Right now, you Americans have the opportunity to really help the world, and Obama, he's the truth. He's the key. He has the power to do so much good in the world, but he needs help and that's one of the reasons I'm here."
We talked a lot more during that evening, and he was extremely lucid. His claims of being an angel were the only thing out of the ordinary, but in no way was he "mentally deranged" or "utterly senseless". As a matter of fact, he was much more observant than most people. Much like myself, he could see through hidden meanings, or see what people were holding back through neuroses developed during years of cultural conditioning. However, he was much better at it than I because he no longer had the trappings of a self-conscious mind. He was aware, but he let himself come out in an unfiltered manner. He was who he was, without any pretension. It was quite remarkable.
His doctor felt otherwise. He told the Airman that he needed "help". The doctor's real self was almost completely hidden away. He was almost entirely pretense, a person's whose neuroses had taken over and were now ruling his mind almost completely... and this was the person charged with making the decision to hold another living person against his will so that he can be forcibly "helped". The Airman accused the doctor of being possessed by the Devil. Perhaps being possessed by the Devil could be interpreted as being possessed by one's neuroses.
Aren't we free to believe whatever we'd like? Who's to say it's wrong to believe you are an angel? There are plenty of people who have claimed some sort of divinity, but that does not make them insane. The experience has left a bit of a bitter taste in my mouth with regard to the mental health systems ability to hold a completely harmless person against his will.

The following is the unabridged introduction to the book The Four Agreements: A Toltec Wisdom Book by Don Miguel Ruiz. I do not want to water this down with my own words, which pale in comparison, so without further ado:

The Smokey Mirror

Three thousand years ago, there was a human just like you and me who lived near a city surrounded by mountains. The human was studying to become a medicine man, to learn the knowledge of his ancestors, but he didn't completely agree with everything he was learning. In his heart, he felt there must be something more.

One day as he slept in a cave, he dreamed that he saw his own body sleeping. He came out of the cave on the night of the new moon. The sky was clear, and he could see millions of stars. Then something happened inside of him that transformed his life forever. He looked at his hands, he felt his body, and he heard his own voice say, "I am made of light; I am made of stars."

He looked at the stars again, and then he realized that it's not the stars that create light, but rather light that creates the stars. "Everything is made of light," he said, "and the space in-between isn't empty." And he knew that everything that exists is one living being, and that light is the messenger of life, because it is alive and contains all information.

Then he realized that although he was made of stars, he was not those stars. "I am in-between the stars," he thought. So he called the stars the tonal, and the light between the stars the nagual, and he knew that what created the harmony and peace between the two is Life or Intent. Without Life, the tonal and the nagual could not exist. Life is the force of the absolute, the supreme, the Creator who creates everything.

This is what he discovered; Everything in existence is a manifestation of the one living being we call God. Everything is God. And he came to the conclusion that human perception is merely light perceiving light. He also saw that matter is a mirror - everything is a mirror that reflects light and creates images of that light - and the world of illusion, the Dream, is just like the smoke which doesn't allow us to see what we really are. "The real us is pure love, pure light," he said.

This realization changed his life. Once he knew what he really was, he looked around at other humans and the rest of nature, and he was amazed at what he saw. He saw himself in everything - in every human, in every animal, in every tree, in the water, in the rain, in the clouds, in the earth. And he saw that Life mixed the tonal and the nagual in different ways to create billions of manifestations of Life.

In those few moments he comprehended everything. He was very excited, and his heart filled with peace. He could hardly wait to tell his people what he had discovered. But there were no words to explain it. He tried to tell the others, but they could not understand. They could see that he had changed, that something beautiful was radiating from his eyes and his voice. They noticed that he no longer had judgement about anything or anyone. He was no longer like anyone else.

He could understand everyone very well, but no one could understand him. They believed that he was an incarnation of God, and he smiled when he heard this and he said, "It is true. I am God. But you are also God. We are the same, you and I. We are images of light. We are God." But still the people didn't understand him.

He had discovered that he was a mirror for the rest of the people, a mirror in which he could see himself. "Everyone is a mirror," he said. He saw himself in everyone, but nobody saw him as themselves. And he realized that everyone was dreaming, but without awareness, without knowing what they really are. They couldn't see him as themselves because there was a wall of fog or smoke between the mirrors. And that wall of fog was made by the interpretation of images of light - the Dream of humans.

Then he knew that he would soon forget all that he had learned. He wanted to remember all the visions he had had, so he decided to call himself the Smokey Mirror so that he would always know that matter is a mirror and the smoke in-between is what keeps us from knowing what we are. He said, "I am the Smokey Mirror, because I am looking at myself in all of you, but we don't recognize each other because of the smoke in-between us. That smoke is the Dream, and the mirror is you, the dreamer."

Kramer: Hey, Jerry rub some lotion on my back.

Jerry: Who are you Mrs. Robinson?

Kramer: Come on! I'll rub some on you.

Jerry: No, that's not sweetening the deal.