Jamie,

    A colleague of mine at UMass wrote a great book on disabilities in
American cinema, and while it doesn't focus on mental illness, I think you'd
find it helpful for your study.  Check out "The Cinema of Isolation: A
History of Physical Disability in the Movies" by Martin F. Norden (Rutgers
University Press, 1994).

    The Library of Congress section on mental illness in film (there is none
on "madness") is PN1995.9.M463.  There have been 7 books written on the
subject, 2 of which are in English:

PN1995.9.M463 F54
Fleming, Michael.
Images of madness: the portrayal of insanity in the feature film (1985)

PN1995.9.M463 R23
Rabkin, Leslie Y.
The celluloid couch: an annotated international filmography of the mental
health professional in the movies and television (1998)

    I'm sure you'll find more when you research individual films on the
subject (e.g., "Psycho" and much of Hitchcock, "Peeping Tom", "I Am Sam",
"David and Lisa", "I Never Promised You a Rose Garden", "Cabinet of Dr.
Caligari", etc.)  By the way, a small film with a big performance by Rob
Lowe (yes, it's true) playing a mentally challenged man is "Square Dance".

    Best wishes with this project.

Dr. Timothy Shary
Assistant Professor of Screen Studies
Clark University
Worcester, MA  01610
508-793-7285

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Online resources for film/TV studies may be found at ScreenSite
http://www.tcf.ua.edu/ScreenSite