I recently asked my pdoc this question after a particularly long and intense psychotic episode. She said that they really don't know whether the brain is damaged or not, but that brain damage occurs when not enough oxygen is in the brain. So I guess the question is whether oxygen deprivation occurs during psychosis? I didn't feel any smarter after her answer.

I feel like psychosis does cause brain damage. Every time I go through a bad episode, I go that much farther down the continuum of "I'll never be the same again."