So after losing only 3 dwarves in combat much of my 220 dwarf fort ended unhappy/very unhappy with a number of tantrums following, leading to 2 hospitalized dwarves and a major form of animal abuse.
Thinking a bit about it and why its so easy to have dwarves become so unhappy, the issue is mainly the fact that losing friends is a powerful cumulative unhappy thought, and for that reason its also often better for dwarves not to make any friends (no friends, no unhappy thoughts for losing dwarves)
A big issue with this is that losing just the three dwarves led to many dwarves getting a -50 to -150 penalty for losing a few of their friends, despite the fact that many of them had 30-40 more friends that were alive. This doesn't seem entirely right, as I would look at it, someone who has only few friends would be more greatly impacted by the loss of one, then someone who has tonnes of friends.
Similar to the unhappy thought of losing a masterwork; -200/remaining number of masterworks, I think something similar should be used for unhappy thoughts such as losing friends. Such as -400/remaining number of friends.(or whatever value is deemed appropriate) This would mean that someone who has 1 friend would be extremely unhappy upon losing that, getting the full -400. Someone who loses one of his 10 friends would only receive -44 happiness. someone that loses 5 of his 40 friends would lose -10, -10, -11, -11, and -12 happiness, instead of an instant -250. As a result the impact of dead friends would be lessened greatly, but extreme losses of life would remain devastating, and dwarves with extremely few friends could potentially be a greater problem then dwarves with many friends.
A similar concept could be applied to a number of other thoughts.
Talking with friends for example. Someone with few friends would be a lot happier form talking to one of their friends, then a dwarf with many friends would.
A dwarf who made their first friend would be more happy about that then a dwarf who made his 50th friend.
A dwarf gaining another sibling/child while already having 10 wouldn't really be excited about it anymore (oh great, -another- mouth to feed)
As for an additional happy thought
For clothing there are only unhappy thoughts for having old/worn/no clothes, but there are no happy thoughts for a dwarf having acquired brand new clothes, or on that note having gotten some masterfully tailored ones. I think it should be added. This of course would only work for clothes the dwarf picked up themselves and gained ownership off, it wouldn't work for clothes picked up and worn due to military uniforms. Nobles could be particularly happy, being that they are always worried about their status, and being well clad would help them maintain that in the eyes of others, or so they think.