Well you probably don't consider Syria to be western Europe, but I happen to have a source that suggests this was the case in medieval Muslim Syria. The book is a discussion of Medieval Syrian Saints:

"Certain men outwardly defied the ideals of Muslim piety by living in a state of ritual impurity, wearing filthy garments, and not praying. Yet, the 'marginal holy man' did not represent a distinct class of saints as such. [...] The muwallah may be regarded as variously a cross between a borderline mystic, saint, vagabond, charlatan, and healer."

Meri translates muwallah as 'one who is mad with devotion to God'. It's unclear whether this refers to a person that we would today consider to be mentally ill. Meri quotes from Ibn Taymiyya:

"It is not possible for anybody to say that this is a friend of God. If this [person] is not insane (majnun), then he is a mutawallih without possessing insanity, or sometimes he would lose his sense of reasoning while at others regain it, and he does not undertake the religious obligations."

Meri relates a few sources regarding one particular muwallah called Yusuf al-Qamini, who was apparently a popular healer and miracle worker in Damascus the early 1200s. It seems this was a person who had lost touch with reality but that people saw a power or religious devotion in his ramblings. Meri quotes from a late medieval writer, Ibn al-Hawrani:

"Yusuf al-Qamini, the muwallah whom the common people regard as a wali [Saint] Their proof is that he possessed illuminations and spoke words based on intuitions. This is what happens with the soothsayer, the monk, and the madman who has and the madman who has a companion of the jinn. This sort of occurrence has increased in our time. God is asked for support. Yusuf used to wallow in his urine, walk barefoot, and repair to the furnace of Nur al-Din's bath. He did not pray."

Meri cites a few other examples and goes on to theorize that muwallah existed as kind of marginal-charismatic figures. They were on the border between madness and holiness. On the one hand they are recorded as often performing no religious duties (like praying) and doing things that proper religious leader would never do like going outside in soiled or insufficient clothing. Yet on the other hand they associated themselves with religious places and common people thought they might perform miracles and healings. They were beyond the boundaries of normal society, but also involved in it, and in that they possessed a kind of religious charisma. Meri writes:

"Men and women did not flock to them because they challenged established norms of learning, but rather for their conventional wisdom and because they regarded them as sacred persons who dispensed miracles and possessed a charismatic personality."

But, were these people mentally ill? If somebody today behaved the way these Damascenes did, we would probably regard them as such. However, our modern society doesn't have a category of person that is expected to act in that manner, but the late medieval society of Damascus did, which may have in turn elicited that behavior. So it becomes completely unclear whether a muwallah was a person suffering from a medical or psychological condition (schizophrenia, epilepsy?) or rather a highly devoted religious person who felt compelled to act in this manner. Perhaps a combination of both?

You might find this to be off topic but a relationship between "marginal" behavior and holiness is definitely documented in folk variations of Islam, both in the middle ages and into the modern era.

Meri, Josef W. The Cult of Saints Among Muslims and Jews in Medieval Syria Oxford University Press, 2003. The discussion of the muwallah can be found in chapter 2, pages 91-100.

I think you need to define what you mean by "mentally ill" more clearly. It is a very broad label.

I'm also really interested in historian's interpretation/ verification of Foucault's claims. Hopefully direct quote from his book would make the question more specific:

the Fool, or the Simpleton assumes more and more importance. He is no longer simply a ridiculous and familiar silhouette in the wings: he stands center stage as the guardian of truth-playing here a role which is the complement and converse of that taken by madness in the tales and the satires. If folly leads each man into a blindness where he is lost, the madman, on the contrary, reminds each man of his truth; in a comedy where each man deceives the other and dupes himself, the madman is comedy to the second degree: the deception of deception; he utters, in his simpleton’s language which makes no show of reason, the words of reason that release, in the comic, the comedy: he speaks love to lovers, the truth of life to the young, the middling reality of things to the proud, to the insolent, and to liars. Even the old feasts of fools, so popular in Flanders and northern Europe, were theatrical events, and organized into social and moral criticism, whatever they may have contained of spontaneous religious parody.

In learned literature, too, Madness or Folly was at work, at the very heart of reason and truth. It is Folly which embarks all men without distinction on its insane ship and binds them to the vocation of a common odyssey (Van Oestvoren’s Blauwe Schute, Brant’s Narrenschiff); it is Folly whose baleful reign Thomas Murner conjures up in his Narrenbeschwörung; it is Folly which gets the best of Love in Corroz’s satire Contre fol amour, or argues with Love as to which of the two comes first, which of the two makes the other possible, and triumphs in Louise Labé’s dialogue, Débat de folie et d’amour. Folly also has its academic pastimes; it is the object of argument, it contends against itself; it is denounced, and defends itself by claiming that it is closer to happiness and truth than reason, that it is closer to reason than reason itself; Jakob Wimpfeling edits the Monopolium philosophorum, and Judocus Gallus the Monopolium et societas, vulgo des lichtschiffs. Finally, at the center of all these serious games, the great humanist texts: the Moria rediviva of Flayder and Erasmus’s Praise of Folly. And confronting all these discussions, with their tireless dialectic, confronting these discourses constantly reworded and reworked, a long dynasty of images, from Hieronymus Bosch with The Cure of Madness and The Ship of Fools, down to Brueghel and his Dulle Griet; woodcuts and engravings transcribe what the theater, what literature and art have already taken up: the intermingled themes of the Feast and of the Dance of Fools. Indeed, from the fifteenth century on, the face of madness has haunted the imagination of Western man.

A sequence of dates speaks for itself: the Dance of Death in the Cimetière des Innocents doubtless dates from the first years of the fifteenth century, the one in the Chaise-Dieu was probably composed around 1460; and it was in 1485 that Guyot Marchant published his Danse macabre. These sixty years, certainly, were dominated by all this grinning imagery of Death. And it was in 1494 that Brant wrote the Narrenschiff; in 1497 it was translated into Latin. In the very last years of the century Hieronymus Bosch painted his Ship of Fools. The Praise of Folly dates from 1509. The order of succession is clear.

In its various forms—plastic or literary—this experience of madness seems extremely coherent. Painting and text constantly refer to one another—commentary here and illustration there. We find the same theme of the Narrentanz over and over in popular festivals, in theatrical performances, in engravings and woodcuts, and the entire last part of the Praise of Folly is constructed on the model of a long dance of madmen in which each profession and each estate parades in turn to form the great round of unreason. It is likely that in Bosch’s Temptation of Saint Anthony in Lisbon, many figures of the fantastic fauna which invade the canvas are borrowed from traditional masks; some perhaps are transferred from the Malleus maleficarum. As for the famous Ship of Fools, is it not a direct translation of Brant’s Narrenschiff, whose title it bears, and of which it seems to illustrate quite precisely canto XXVII, also consecrated to stigmatizing “drunkards and gluttons”? It has even been suggested that Bosch’s painting was part of a series of pictures illustrating the principal cantos of Brant’s poem.

quote from Foucault, M., Madness and Civilization

Are you familiar with these artifacts? Do you agree with Foucault's interpretation that they indicate a general social attitude which treated madness with inclusion, and in fact, as a significant source of meaning/ truth?