i can name plenty of books where people are mental to begin with but honestly there are very VERY few books like this because nobody can fully comprehend what its like to be insane without being insane, and most insane people don't think to write their insanity on paper.. but i will recommend you google for some schizophrenia stories of patients who have recovered, they are by far more fascinating than any fictional stuff that i could possibly recommend you. some links to get you started
http://www.schizophrenia.com/success.php
and
http://www.schizophreniadiaries.com/stories/index.php
all of which are true.
for books, if you haven't read stuff like, a beautiful mind(EMPEROR OF ANTARCTICA FTW! lol), bell jar(meh not crazy enough for my taste tbh but still kinda nuts and a good read), hurry down sunshine( almost dont want to mention because i thought it sucked, but a lot of people think its great, so its hit or miss, honesty after her breakdown i got bored with it its about a bipolar girl and her descent into it from her fathers prospective, only read this if you get it for free) so theres some to get you started.
OHHH!how could i forget "i know this much is true" maybe it seems like i just really like books about paranoid schizoidz but honestly they are 10x more interesting than books about retards or bipolar people, ect. its about a guy who takes care of his schizo twin brother and then all of a sudden his brother goes off his meds and hacks off his hand in a library for god and gets sent off. really great read but its rediculously long, but it kept my attention throughout. skim over the boring flashback shit about their grandfather, why woudl andyone want to read that.
hope thsi helps!