Alright. Searched the suggestions forum for all instances of the word "sanity" and haven't found any on-point, so I have one that might be a nice, procedural solution for dwarven mental health that is flexible and simpler than, say, a whole range of specific insanities/dysfunctions.
In the Unknown Armies pen-and-paper RPG rulebook, there is a gem of a sanity/insanity system that, supposedly, is similar to, but more powerful and flexible to Call of Cthulhu's (from what I've read of people's comments; I haven't read the CoC rulebook, myself).
This is how it runs down. I'm going to explain it in terms of Unknown Armies's game mechanics for simplicity, but obviously Toady could translate it any way he sees fit.
The system is based on five categories of mental stress: Violence, Unnatural (could also be called sense of reality), Helplessness, Isolation and Self. In order to keep this post from becoming a multi-tile Wall of Text, I'm not going to go into definitions for these, but I'd be happy to explain if anyone's curious.
In each one of these you, have two meters: Hardened and Failed.
Hardened ranges from 0 to 10 "notches", while Failed ranges from 0 to 5.
Any given stressful experience affects one or more Stresses, and (in the Unknown Armies system) has a difficulty category of 1 to 10. The idea is that the character, if he is not sufficiently hardened, has to make a sanity check against his Mind stat to see how he deals with it. If he succeeds, he gains a rank of being Hardened toward that Stress. If he fails, he puts a notch in the Failed meter toward that Stress.
Hardened means he coped, though at some cost to his humanity (dwarfity), and Failed means he did not cope, and is now psychologically damaged as a result.
Example: So, say, Urist McInnocent, who has only two ranks of Hardened in Violence, sees someone killed for the first time in his life. Seeing someone killed is, say, a difficulty-3 Violence Stress check. He has to make a check against his Mind stat.
If he succeeds, yay, he now has another rank in Hardened, for a total of 3, and now he'll shrug off difficulty-3 Stress checks without having to make a Mind check. If he fails, he puts a notch in the Failed meter, with consequences we'll examine shortly.
Now, though he now laughs at Violence stresses of difficulty 3 or below, a difficulty-4 or higher stress will still require a Mind check. We're upping the sanity ante. Once a character has reached 10 ranks of Hardened in a given Stress, he is now "so jaded and blase" about it that he is impervious to that Stress.
So, a dwarf becoming Hardened, just like a human becoming so, has very important and positive effects on his ability to survive in his environment. Of course, we are all probably aware of the negative effects of someone being Hardened to something: they become callous.
And, as a matter of fact, the UA system accounts for this. To quote the author:
This is not a good thing. Mental stress makes us vulnerable. But it also makes us human. If you fill in too many hardened marks, you become so completely callous that you are unable to feel fear at all. That's because you are now cut off from a broad range of emotional experiences that everyone else shares. You're 'hardened' all right: hardened into an emotional fortress[], completely isolated, unable to make a fundamental connection with other human beings. You're a sociopath.
If you get ten ranks of Hardened in two or more Stresses, or if your total of Hardened ranks exceeds 35, you become a sociopath. In UA game terms, you become disconnected from your passions (specific Noble, Rage and Fear passions), which within that system allow you to do extroardinary feats if the situation triggers them, and certain types of mages lose their empathic connection to the source of their magic.
Now, Failed marks are much worse. If a Stress check is failed, the unfortunate sot gets to choose one of three responses: panic (gibbering and freaking out), paralysis (freezing up like a well-lit deer, not literal paralysis), or frenzy (going batshit crazy and attacking the source of the stress). The response lasts until the fear source is gone, but the character immune to other Stresses until it's gone as well, since he's too whacked to process them.
If a character acquires 5 notches in the Failed meter, he becomes insane with regard to that Stress, and a little bit in general. He picks up a tic, some sort of mental aberration. And any time he faces that Stress again, he gets no Mind check. He just goes straight to panic, paralysis or frenzy. Do not pass Go, do not collect your medication.
The tic/mental aberration can take the form of a phobia, a trauma bond (i.e., associating some incidental thing connected to the event with it, as in the classic case of a PTSD war veteran triggering at the sound of a wine cork popping), flashbacks, blackouts/fugue states, addictive behaviors, philia/obsession, delusions, and probably other things. This stuff could be a lot of Fun.
The game also does allow for psychological first-aid and long-term mental health, so that counseling can eliminate notches from either meters.
The UA rulebook goes on in considerable (and enjoyable, well-written) detail about the different Stresses, with examples of different difficulty levels of checks and what they mean in real-world terms. It also gives descriptions of different levels in the Hardened and Failed meters in each Stress, likewise with real-world meanings.
Anyway, that's the basic rundown, drawn from pages 64-71 of the UA rulebook.
As you can see, it's a sanity system not dependent on a laundry list of pathologies, but rather on the source material -- the different areas of trauma handled by the brain. This sort of system would allow for a procedural, more nuanced treatment of mental issues in DF (with lots of comical potential, I'm sure; Urist McInnocent sees his buddy raised as a zombie next to his pet cat, and trauma-bonds the Unnatural failed stress check he makes to the cat; now his pet cat is a trigger and he occasionally flees, eventually one day going berzerk and killing it).
It's really fascinating reading, actually. Greg Stolze and John Tynes, the authors, either know their shit off-hand or did some serious research. The chapter is great reading on its own, but I'm not here to pimp it. I think, though, you definitely might find it a great source to check out, Toady.
[Note: This is serious fucking subject matter. As much as I've been humorous or casual with this, apologies and respect to people who are facing PTSD from war experiences or other serious life traumas. None of this is intended to make light of that or the people who genuinely suffer from them.]