Shovani Dreaming Sickness

When old age takes certain lizardfolk, a special form of dementia sometimes appears. The sufferer starts to lose their ability to distinguish dreams from reality, with their waking and sleeping lives blending together. They remain largely lucid, and can usually tell when sufficiently absurd circumstances are the property of their imagination, but that still leaves the many dreams of ordinary events that may or may not have actually occurred. In some extreme cases, when confronted with particularly odd or absurd events, some lizardfolk with dreaming sickness have assumed that they must be dreaming, leading to a variety of odd responses.
That said, after the first few incidents, someone with dreaming sickness typically learns not to say or do anything extreme in either sleep or waking just in case. It becomes difficult to live, however, when memories of what is real and what is not real begin to blend together, and many withdraw from society rather than risk embarrassment by referring to historical events that never occurred or referencing people that do not exist.
Strangely, this affliction seems to affect only lizardfolk in the Shovani region. Lizardfolk moving to the area have ended up contracting the condition so it's likely not genetic, but there doesn't seem any logical reason that the illness would be so isolated.
The truth is that this sickness is a side-effect of Leviathan's lifelong harvest of mental and psychic energy from the lizardfolk of Shovani, a process of which most of them are totally ignorant. Leviathan uses the energy to supplement its own mental defenses against psychic intrusion and attacks in the dream realm. The slow loss of the ability to tell dreaming from waking can be halted (but not reversed) by leaving the greater Shovani area.
Many of Leviathan's actions stem from a desire to minimize and conceal this phenomenon, from its frequent use of the armed forces to its embrace of a justice system that uses ritualized combat to its insistence that all citizens serve a set number of years in the military.
If word of this condition's true cause were to get out it could cause the entire lizardfolk nation to suffer an unprecedented crisis (provided there was some form of proof or evidence, which would probably be rather difficult to obtain given the nature of the phenomenon).

Causes

From above: The truth is that this sickness is a side-effect of Leviathan's lifelong harvest of mental and psychic energy from the lizardfolk of Shovani, a process of which most of them are totally ignorant. Leviathan uses the energy to supplement its own mental defenses against psychic intrusion and attacks in the dream realm.

Treatment

From Above: The slow loss of the ability to tell dreaming from waking can be halted (but not reversed) by leaving the greater Shovani area.
Powerful magic or psionics could restore a mind that begins to unravel in this way, but there is a strong cultural taboo against preventing a mind from "passing on" because Leviathan fears a very powerful spellcaster or psionicist could become curious about the origin of the disease and seek to investigate.

Cultural Reception

Dreaming Sickness is a taboo topic of conversation among Shovani lizardfolk, so much so that the condition isn't widely known outside the city-state. While discussing it with outsiders is not forbidden, it tends to make lizardfolk uncomfortable, and they generally only resort to talking openly about it when circumstances leave them no choice.

Type

Mental