Green’s Dictionary of Slang

(US) crazy, insane.

1948		(con. 1944) N. Mailer Naked and Dead 359: The third man lay on his back [...] his eyes staring vacantly at the ridgepole. He’s Section Eight, Minetta told himself.
1990		(con. c.1970) G. Hasford Phantom Blooper 9: I watch the Kid From Brooklyn, hunched over a suspended carcass, indulging himself in his grubby hobby. I know that it is my job to [...] drag his section eight ass back behind the wire where it belongs.