He may be crazy but it doesn't mean he can't have some thoughts based on reality. But we can't tell for certain. He did seem to have quite a cohesive story about Pandora Zurlo. And it seems rather consistent with descriptions of her. He could've, however, read plenty of books on the matter. Or perhaps he has in fact, as he said survived from an encounter. I can't think of anything worse than surviving one's own child. But I wouldn't know.
You've referred to having difficulty sleeping. Have you also been having nightmares?