Morgellons may be a real disease (which I don't know...) but in this case I have the impression that is not the case. Stress and lack of sleep can certainly make one see and believe strange things, it happened to me in my late 20s. First I began losing sleep and eventually unable to sleep at all, after one such night when the sun came up one morning my mind was not my own anymore and I had to be hospitalized and medicated. For a good while I was still convinced that what I'd "seen" was real, it was kind of like the Matrix, since it happened in my mind it was real to me but eventually I accepted that it was not.
The real interesting part is that I read about hypoglicemia's effect on the mind and moods and I went to an endocrinologist who ordered a glucose tolerance test which came back positive. I went on a low-sugar diet, made sure I exercised and took a stres management course and I never had any more of those episodes.
Please don't be scared of having to take meds for a time, you sound like a very sharp person and I'm sure you'll be back to normal in no time if you take good care of yourself.