There's a definite phenomenon when a kid who is smart or talented in a certain area becomes an undergrad and suddenly gets their ego pummelled. They may have been the smartest kid at their school, particularly if it was a small one, or the most talented at a certain subject. But once you go to a big elite institution, you, perhaps for the first time, meet people who are smarter than you. Perhaps not just a few, either, perhaps you are the smartest kid in your year at school but in the bottom 10% at your new University. A lot of these kids, let's face it, are probably huge dweebs who coped with getting pushed into lockers by making their intellect the centre of their ego. Perhaps their parents encouraged this, "those kids might call you names now but in 10 years they'll be cleaning the toilet in your mansion" sort of thing to help them cope with bullying but giving them a really unhealthy ego about how smart they are. But then the consequences of no longer being a big fish in a small pond can be absolutely catastrophic, especially as going away to university may, especially for sheltered nerds, be a time of other big shocks, living away from home, being exposed to drugs and drinking and partying and some of those kids can't cope at all.
I think that's what happened to Ernest. He's fairly smart, but not a genius by any respect, but I suspect that when he ended up at CalTech his intellect was the foundation of his self-esteem, and meeting all those people who were smarter than him was a disastrous blow to his ego. He talks about "intellectual jocks" or similar to describe other CalTech undergrads, and that's very telling. He viewed those people as a threat to him because he had developed a narcissistic need to be the smartest guy in the room, something which still drives him even after his mind snapped.
I can sort of see the "logic" of getting into psychedelics and occultism in these circumstances. If you can't beat the "intellectual jocks" in raw brain power or academic achievement, you can try to know things they can't know to make sure that you are still on top of the pile. Patrick Tomlinson has a related cope where he says his appalling lack of any academic ability (1.2 GPA) was because he was concentrating on "more important things", meaning that he can still think he's the smartest man in the world in the face of all the evidence. And for Ernest, those mean ol' jocks who would discuss Foucault or do 5-dimensional matrix transformations or whatever they were doing that he couldn't do, wouldn't see the hidden truth, man. All those things they were doing were irrelevant, it didn't matter that they were better than him at those things, he just declared those things to be unimportant because he had access to special esoteric knowledge.
A lot of people get into occultism out of ego. They don't seek truth so much as they seek truths that mere mortals don't have, which is why many prominent occultists end up forming cults (L. Ron Hubbard was a member of the Ordo Temporo Orientalis, the cult founded by Aleister Crowley, before he came up with scientology). Most psychonauts warn against going into psychedelics with an ego, because it will fuck you up and break your perception of reality, and that is certainly what happened to Ernest. He couldn't cope with not being at the top of the academic pile any more, so he declared CalTech academia to be evil and irrelevant (a position he still holds), and decided to get fucked up on shrooms until he flunked out. Ever since, Ernest has been driven by a need to know things that other people don't know, so he can be secure in his self-image as the smartest man alive. That led him down the path of continued psychedelic abuse and the pursuit of esoteric and occult ideas until he melted his mind into slag and thinks he's a videogame - but the smartest videogame, a videogame who knows things that you don't know, who the entire world revolves around. And is so often found in psychosis, delusions of grandeur and paranoia go together, especially for someone with Ernest's psychology, as he is desperate to come up for explanations for his failure that don't imperil his view of himself as the world's smartest man - and a conspiracy against him is the perfect reason why that would be.
Actually studying Ernest and Fatrick is interesting, in terms of the differing ways they respond to failure. Ernest and Fatrick have both been called narcissists and sociopaths, indeed some people use those ideas interchangeably. But they're not the same ideas, and the differences between the two are very stark when you examine these two people, and especially their responses to failure. Because Fatrick is a sociopath, he just declares himself to have succeeded anyway and anyone who points out the obvious is instructed to Enjoy Prison. Ernest, though, is not a sociopath but a deeply insecure narcissist. That's where his aggression comes from, anyone smarter than him threatens him and makes him feel inadequate, so he declares them to be fools and threatens to kill them if they push back. Fools, though, not idiots. An idiot doesn't understand something. A fool understands the wrong thing. So someone can be smarter than Ernest, but he can simply declare their expertise irrelevant and continue his LARP, rather than smash into their ideas head-on like Fatrick.
EDIT: Another distinction between them is that Fatrick, as a sociopath, wants to convince other people of his brilliance. His entire personality is based on gaining social capital. Whether Pat succeeds or not is irrelevant, what's important is that other people think he has succeeded. Ernest, though, primarily wants to convince himself, because he is an insecure narcissist. Hence his long soliloquies to nobody and his rambling livejournals. It's all about convincing himself that he is a genius, picking fights with people is just a means to that end.
