Is chess damaging to one's mental health?

People like Fischer were supposed to be nutso and there is certainly a stigma against chess players. Is there any legitimacy to that? Is chess a game that appeals to mad people? does chess drive people mad?

The psychiatrist and chess player Reuben Fine confirmed that in his book "The psychology of the chess player.
The game appeals to people with a tendency towards certain disorders and the focus on the game does nothing to counteract this tendency.

depends on what you are asking. since you mentioned fischer i guess you mean whether devoting most part of your life to chess is just madness or not? maybe you mean if one is mad in other aspects of life he's more likely to be good chess player? maybe! lots of genius people generally are genius because their brain can process things others' can't so it may even make them sound crazy, they may be realizing something others cant, saying nothing crazy but rather actually biggest truth but society of normal people may consider that crazy because they can't comprehend it.

so on flipside, if one sounds mad there's little more but still more likely that he has bigger chess talent.

Let us efine "mad" or "nuts" as admitted in a mental asylum and hence diagnosed as such by a psychiatrist.
As such there are many known cases at top level e.g; Akiba Rubinstein, but also at lower levels e.g. rated 2100-2300.

There are lots of crazy people with life destroying disorders or a history of being professionally cared for or diagnosed outside of chess, but are chess players as such at a higher rate than normal?

Fine wrote in his booklet: yes. He mentions paranoia, megalomania, exhibitionism, discusses cases and proposes reasons why.
I know several people who were admitted into mental asylums and most of these are chess players. I may be biassed: as I chess player I know more chess players...

It's also interesting that you hear about STRONG chess players being nutso, Is that just because the good ones get more exposure or because crazies tend to do well in chess?

Well the thing is, GMs and high rated players tend to have higher IQs. Its said that people with high IQs tend to be more prone to mental illnesses. Its estimated that magnus Carlsen's IQ is in the 190s, same might go for Fisher.

My IQ is 178 and I was never diagnosed with anything, had no problems in my upbringing, am in great physical health and am financially more than stable.