Obviously, it was one of the hard parts of the comic to blur the lines between mental illness and spiritual belief (if we can call it that to simplify the Mephisto situation).
Still, how far are one from another? In either case, a zealous believer or a mental patient will have make no discernment between good or evil.
In Karl's case, I wanted to let the reader decide in a way whether Karl believed in Mephisto or whether he was a figment of his imagination.
You say Mephisto only speaks to Karl... how many people say God speaks only to them? And how many out of that lot are mental or zealous?
Either explanation is good for Mephisto. The only two people who actually KNOW what Mephisto is (mental illness or spiritual entity) are Mephisto and Karl... well, and I.
But I won't give THAt away... as I said, I wanted to let the reader decide what he or she thought was the reason behind Karl's wanton acts of violence, lust, etc.
About Karl's descent into depravity, I wouldn't say only his boss made it go off, but as much mental illnesses, it's an accumulation of many things over a lapse of time which are then triggered by an event.
As for the insanity plea... well, what would you think an antisocial, misanthropic person like Karl would rather do? Go to prison with tons of killers and get ripped apart? Or plea insanity and stay alone, "acting out" his insanity... or his real insanity?
Karl simply thought out what was best for him...
If he was either a mentally ill person or a zealous believer, the story would have went the same way, as both would just act/think as one, not discerning about normal societal values.