I don't think you've gone crazy. Not unless we all have.

[Which... you know. Can't exactly be counted out. They're all turning into weird monsters, right? Maybe that's messing with their heads in ways they aren't really aware of.]

I think... uh, I've heard of this stuff, and I'm pretty sure this is wherever the Fog God people hang out. It was either a town, or an arcade...

[She's not sure why one of them would shack up in an arcade of all places. If you're a god, wouldn't you want something big to rule over as your base of operations?]