I saw it the other day aswell. It was all a mind trick they were playing on him, and at the end, we find that out. He was Andrew Laeddis, and yes, he was insane. I found it a bit confusing aswell - I would rather have seen Law Abiding Citizen though.
All in all, Shutter Island was not a great movie, but not too bad either.
Is it really worth living your life after you find out it was all a lie? He had nothing going for him in the end. So why even bother. It's like waking up from the matrix, you have no where to go because you have nothing. That's my conclusion, and I'm pretty sure he was sane.
I thought it was a good movie.
Joymax, what a joke. (Thanks to Grandpa for the sig)
Yes he is actually insane. Everything is explained in the end. However when he says " Is it better to die like a good man? Or live like a monster?" My oppinion is that now that he realizes that his wife killed his kids and he killed his wife, he doesn't want to live anymore and feels like a "monster" therefore he goes with the warden fully knowing what will happen to him, perhaps even committing suicide. (Aka he just pretends to be crazy/delusional in the end).