The things he has been saying are insane - in the sense that they represent views utterly divorced from reality as normally understood. They exhibit a kind of paranoia and militantism that we do not associate with a balanced state of mind. Of course, much of this is context-dependent - what is considered insane in one period of history is considered the norm in others. So we must take into account the fact that he lives in a liberal democracy where those ideas are very far from the norm. Whether he has acquired such views through some personal mental deficiency, cult brain-washing, PTSD, psychotic break or none of those things is really moot to the discussion. The ideas in themselves
are insane and poisonous and ought to be treated in that light and not legitimised by according them an attitude of respectful tolerance. Ideas cannot claim the privileges of individuals and individuals cannot claim the right to tolerance without first extending it their fellows. This is part of the social contract that allows us to live side by side without killing each other.
Of course it's entirely possible that Holocaust deniers are sane: the perpetrators and supporters of the Holocaust were, on the whole, sane, after all. It's possible to be clinically sane and to believe or even do crazy things. You are correct that we sometimes suppose sane people to be crazy when they do insane things but this is less because we doubt ourselves (we ought to doubt ourselves more, in fact) and more because we find it impossible to empathise with people who commit or endorse evil acts. Empathy carries within it the same paradox as tolerance, embedded as it is in the same basic psychology of the social animal that is man. Its universality can only extend so far - we cannot empathise with the unempathic, and evil requires the suspension of empathy. Whether someone is "evil" or "crazy" is just a matter of the labels we use to distance ourselves from toxicity. They also carry notions of moral responsibility and reprehensibility but even those are questionable since empathy deficit can legitimately be considered a mental disorder. Fundamentally, all we are doing is defining acceptable norms of behaviour for our species, and drawing lines around / excluding those things which are too poisonous to be allowed to persist.