I would go back to your regular doctor, pdoc and/or the sleep clinic, see if they can find another cause of your insomnia; it definitely doesn't sound normal and could be a different, more serious sleep disorder. You shouldn't be hallucinating, that's not good losing that much sleep that you hallucinate. All your doctors need to talk together and try something different; the cpap isn't working so it's probably not your sleep apnea that's the main problem?