Freud said that dreams are a discharge of a build up of libido energy. One of the doctors that Mahoney quotes, Katan, states that as well plus that hallucinations and delusions are a discharge of repressed libido energy.
When I used to have psychotic episodes it was like my imagination would just run away with me. I see a strong connection between sexuality and imagination. Every time we dream we have an increased blood flow to our groin area which to me just confirms what Freud was saying.
I have to say this with a smile on my face, I once told this wise older father figure friend of mine that I read somewhere that celibate people are more creative than non-celibate people. He just sort of smiled and said, "I don't think that I want to be that creative."