Tricky question, boundaries can be so tough, even for those of us who are not overly "sick".

Basically I suggest to treat your friend with respect and be clear, consistent, and caring when you set the boundary. If you do this, then conflict is less likely to result...... conflict which could result in more boundary struggles between the two of you then or in the future.

I have recently learnt more about boundaries myself... the hard way. I do not however think that it is usually just one person at fault when two "mentally ill" people fall out due to a boundary issue.

Good luck.

Take care,
Fuzzy