Can we at least agree that if the child comes out with 1 level, it's a success? Not of practically, but a success of depravity?
That said, any animal that can be tamed will breed. I've bred wolves bought from elves, bears, others have bred giant eagles, etc. Foxes should do nicely. Macaque might be an interesting choice as well, if you go with the almost-vanilla mod of removing _EXOTIC. I think most of us can agree that's a change you can make and still be vanilla, because DMs are bugged.
That said, with birds, birthrate can play a significant roll. Not only will the child occasionally counterattack and kill, but they also hurt each other, and kill their siblings. This lends itself to two things. 1: The animals in the cage will stabilize itself by virtue of infighting, but multiple cages may hit the animal cap. 2: As the animals kill each other, the child will stop caring, and this can stabilize the mood issue, if it happens quickly enough. Extra entry trauma such as a dozen dropped goblins may be needed to provoke a faster psyche shattering and increase long-term health. Bonus points if you drop the child's siblings, not for science, for sheer terror.
It seems that, ultimately, we have two problems. The child dies by injury, in which case the animal is too severe, or the child dies by insanity, in which case the waterfall wasn't working. While an ecstatic test subject doesn't sound very dorfy, it may be needed to have a super-elevated mood simply to ensure survival. Replace walls with platinum masterwork statues, and allow for a mist generator. Lavish meals and an opulent bed. Obsidian cast and then engrave the room. Perhaps give the child another room that he never uses, a private royal dining hall, he may get good thoughts from owning it even if never using it. Maybe. Do everything possible without expanding the room or allowing others in.