The only way we can evaluate the mental state of the Old Testament's god is by reading and examining the texts, claimed by believers to express god's thoughts and will. This reading gives overwhelmingly satisfying evidence of god as a truly mentally disturbed person. This is well described by several professionals with convincing arguments and text references. So arguing against the diagnosis is like whipping a dead horse; it won't get your carriage moving; you'll just tire yourself.
If God is an eternal being that means he's spent the majority of his time alone -- basically in solitary confinement, then one day during his infinity he decides to create man. Think about it -- if someone has spent their entire life with no social interaction, said person would be insane, anti-social, and lack any social graces and/or skills. He needs us to set him straight on proper behavior and love than we need an anti-social bully and abuser.
The Bible God depicts itself by it's actions as a murderous, death loving psychopath and as completely Irrational, when it massacres and has massacred multiple innocents in order to rid the world of a collection of bad apples. If it was truly Omnipotent and Omniscient, it would know each bad person and be able to remove them without the massacre of innocents or entire cities. This is just a small part of the gross Irrationality of the Bible. The God of the Bible even describes itself as a Malevolent Narcissistic Megalomaniac in the few passages where it is described as a Jealous God. Though these passages also allude to there being Multiple Gods and thus the God has reason to be Jealous, since likely all the other Gods are more Benevolent than the Bible God.
Actually the Hebrew word for God (Elohim) in many passages, is actually plural, meaning Gods.
Such as Gods created the world, (not god created the world).
God does not abide to our perception of normal. Someone that has the power to create the universe, flood planets, make man in his image and create a rock so large he cannot lift it himself (here's the part where you roll your eye and give out a polite laugh).
Since his mind works on a divine plane in a way so much more different than ours we cannot apply normal social behaviors and western thoughts, definitions and standards; just like we do not expect an oak tree to discuss it's thoughts with us, for even if trees could think they we would not be able to make sense of whatever perceptions they have. Nor do we expect a born blind person to ever fully understand the concept of color; We cannot understand the thought of god no matter how many words we use.
So, no, God is not insane. He might be a lot of things, but since he does not sense the world as we do and is not a human the concept is rather bleak in this context.
Also, remember that the bible is inconsistent, not because our lord is inconsistent, but because society is. Our bible is just the result of oral tales passed down generation after generation with every error that such a method of preservation; split down into multiple fragments that we randomly found and have to glue together to create something that sort of makes sense. It's not perfect, nothing is, but it gives us a good enough site into the standards and morals that was the accepted norm when the fragments were written.
The Biblical God loves humanity, but because humanity turned away, he had to dish out more than a little pain to get their attention. See, this is what happens when you turn away from good things, as though turning away wasn't punishment enough. Also, think of it this way: You've been nice. You've been reasonable. You have been reduced to two choices without fundamentally altering things that will bite them later on: either mind-rape everything, or scare them into submission. That is how a human would see it.
Also, and here's where it gets good, take a gander at the word "metaphor" some time, then get back to us.