Yes. Whether he strikes first or he goes out in a "blaze of glory", he is preparing to use the only tactic that has a chance of succeeding. He has so much as said this in the past, that he will inflict enormous pain on his attacker (even if he is himself destroyed in the process). You are right he is insane, and GW is right that his fingers must be removed from the levers of power and destruction.
It may be too late to do this without severe pain on the world. Thus, once Gulf War II begins, it may wind up quickly with America withdrawing in defeat. If America suffers from sleepers enough that Bush cannot stomach Iraq's ability to fight back here at home, it could be very bad for Israel as she stands alone.