Brief, spoiler laden guide to The Sane Asylum, because I like the quest and I felt like it.
******* SPOILERS *******
Fred's been kidnapped and you need to rescue him! You also need to restore an insane asylum to sanity (such as it is) and talk to Durk.
The wiki page is pretty good and covers most of what you need to know. It is here: http://ddowiki.com/page/The_Sane_Asylum
Many of the mobs in this quest are vulnerable to light damage.
Usual mass buffs
Protection from Evil
Cold Resist (final fight)
There are two ways into the asylum from the entrance - straight ahead or the side door (to your left on entry).
The side door way is probably quicker and involves less insane magic users. There is, however, a fire trap that can be lethal even on Normal difficulty.
The straight ahead way will introduce you to the basic Reality/Daydream/Nightmare phase concept of the level in a gentle fashion. With reavers. It's more tedious to zerg this way as there is a door that only drops when everything is dead.
Once inside the asylum and past the rather attractive receptionist, you come to the first puzzle.
There are two puzzles in Sane Asylum, not one - the first puzzle is the asylum itself. Xoriat energy has turned it into three different phases (usually referred to 'Reality', 'Daydream' and 'Nightmare'. Rather than getting confused which phase is which, I'm just going to refer to them as phase 1, 2 and 3. This only make a difference in the main asylum proper. You transfer between the phases by killing the named reavers / render. The different phases have different layouts and different ways that are open.
Phase 1 can be recognised as 'Normal' vision - everything looks fine and the patients are not hostile. A (small, crude and probably wrong) map for phase 1 can be found here (can't embed images - sorry)
Phase 2 can be recognised by the blue haze that appears at the edge of your screen. Patients attack you and the three secret areas can be reached. A map for phase 2 can be found here:
Note that the secret areas are reached by entering certain cells while the patient is still alive. If necessary, lure the patient away from the door if he's blocking it.
Pase 3 can be recognised by the dark tint to the screen. Patients still attack you. Map here:
If you want to get everything from the quest, you need to do the following:
Explore the level. In some cells, the floor gives way (see the Wiki map for details), giving access to two beholders and a chest / shrine room.
Approach the beholders but do not kill them
Feel free to loot the shrine chest
Go through the now open central northern door, shrine and solve the puzzle.
I've seen five different solutions to the puzzle (no idea if they differ based on difficulty or something, but the easy solutions seem much more common). Solutions are here:
http://files1.guildlaunch.net/guild/...ons2267Pop.jpg/ (Thanks to LurchAddams below for creating this composite image)
To determine which solution to use, look at the floor and ceiling tiles close to Fred.
Taking the light path for solution 1, look at the second tile from Fred - if the two tiles are identical, use solution 1.
If they are different, look at the light path for solution 2 - if the first tile from Fred is identical on ceiling and floor, use solution 2.
If they are different as well, look at the first tile on path 3 - if they are symmetrical top and bottom, use solution 3.
Otherwise, use solution 4.
Solution 5, given above, is, I believe a redundant variant of solution 2 and can probably be ignored.
In all cases, turn the tile that Fred is standing on in order to finish the puzzle.
Remember to ask Fred for a reward, in order to get the chest with the Sustaining Symbiont (http://ddowiki.com/page/Sustaining_Symbiont) in it. The Symbiont drops on all difficulties, but is more common on elite.
Head back and kill the Right and Wrong Eyes. Note that you'll be teleported between the two during the fight, and the Right Eye is self-healing. No idea if fighting them in two groups simultaneously makes it any easier or not.
Once the eyes are dead, there should be an extra chest just down the corridor from where Fred was trapped. If you kill either of the eyes before solving the puzzle, the puzzle becomes unsolvable and you cannot get the Symbiont chest.
Head down the corridor until you reach a dropping point. Buff up (cold resist is good) and drop down.
Nurse Ratchet is a cold beholder with several nasty attacks. Every now and then it will teleport to someone and you will get a warning message. At this point, everyone should run away from the Nurse. She will do an increasingly damaging AoE attack that is best avoided.
When the Nurse is dead, you'll be teleported to the reception area, where Fred has locked the asylum. There will be a chest, with the possibility of a Shard of Xoriat (http://ddowiki.com/page/Shard_of_Xoriat) in it.
Job done (unless you forgot to talk to Durk at the beginning).