I've always assumed that you cannot ready insane characters because they need to be restored before they can be readied. But after searching the rules and FAQ I couldn't find any indication that it wouldn't work.

E.g. Could I use Y'Golonac's action to ready an insane character? I'm pretty sure I can target an insane character, but what happens to the character afterwards? Is he actually readied (and thus has to commit to the same story as Y'Golonac, if able)?

Finally, if it is possible to ready an insane character, is the character also considered to be restored (e.g. to trigger the response of Mad Genius or Student Archaeologist)?

Edit: This forum software is driving me nuts - I'm going to try reposting this in the Rules Sub-Forum, please post any answers there.

Very last page of the FAQ, it's actually the second-to-last of those italicized questions:

Can I ready Insane characters during my Refresh Phase?
No, Insane is a state like Ready and Exhausted. Insane characters that are not restored cannot be Ready or Exhausted.