Saddam was bat fuck nuts and you need about two conversations with the man to realise this.
Did you have two conversations with the man? If so, please share, I think that would be fascinating.
Personally, I'd avoid psychiatric diagnosis. My own view of the man is that he was a person of spectacularly bad judgement.
He seems to have been inspired by and patterned himself after Stalin, but Stalin himself had a history of massively bad judgement which Saddam seems to have overlooked.
The qualities in Stalin that he chose to emulate were his perceptions of strength, ruthlessness and perserverance. His ability to wield absolute power at home by terrorizing his enemies and rivals on an individual level, and crippling without apparent consequence internal forces such as religious or nationalist movements or communities. He tried to apply these lessons to Iraq, and created a brutal state apparatus which maintained him in power.
But beyond that, Stalin was a buffoon and blunderer. He got hornswoggled by Hitler, which is appalling. His experiences with China and North Korea were epic blunders. His strategic, military and security decisions hurt the USSR as much as it helped. Saddam overlooked that. And he overlooked Stalin's modern tarnished legacy.
And that's a shame, because had he had a clearer eye on his hero, it might have warned him of the consequences of brutality and bad judgement. WWII was not Stalin's shining moment of strength and glory, it was under Stalin a meat grinder where he inched his way to victory, losing a major segment of the Soviet population and half wrecking the country. A generation later, the USSR still had not fully recovered from the War. And yet, with that in front of him, Saddam embraced a reckless war with Iran. Based on.... what? Assurances of support from Saudi Arabia, Kuwait and the Gulf states? Some notion of American backing? And yet, during this war, he pretty much failed to consolidate that support, so vague and ephemeral that only self delusion could have persuaded him it was ever reliable.
He had this vision of a quick and easy win over Iran, but seems to have made no real calculations of risk, or assessment as to what would happen if things went wrong. It was a chain reaction, each bad decision simply lead to the next bad decision, a dance of blunders and missteps at every point, digging himself and his country in deeper.
A truly crazy Saddam would have amounted to nothing. People don't follow crazy people. No matter how brutal the rule, genuine wackiness is not a long term strategy for survival.
The appears to have had some affinity for office and interpersonal politics, he was a very competent knife fighter in the Baathist party, and sound enough to kiss the right asses at the right time. In power, he had enough cunning and enough mastery of local politics, enough nastiness, to maintain himself.
But he completely failed to grasp the realities of the larger world around him in any meaningful way. He read his own meaning into April Glaispie's words, was outmaneuvered by the corrupt inbreds of the Kuwaiti royal family (and didn't that tell us all we needed to know). His military assessments were abysmal, his grasp of economics, international relations and politics, etc. were worse.
History will record him as a clown and a blunderer, though one dipped in red.
A Smart Saddam? That would have been truly dangerous. A smart Saddam could well have taken Kuwait, and bought American support into the bargain. And he could well have sewn up the Persian Gulf.