I must apologize for my imprecision. Having refamiliarized myself with the clinical characteristics of a sociopath, I find myself somewhat more in agreement with your assessment than I had at first realized ... and I don't believe we're so far apart in our perceptions of him as I'd thought.
Interestingly enough, "sociopath" was once called "moral insanity." I suppose there are those who find themselves on such a path because they're incapable of choosing another. They simply don't have the psychological tools. I don't see Gul Dukat in that fashion, though---at least not exclusively. In my eyes, though, he's worse. Earlier Dukat, in my opinion, is evil, and chooses his delusions---or, rather, uses his illusions---as a way to justify his actions and yet see himself as persecuted and heroic.
While Dukat does possess the majority of attributes associated with the sociopath, I would hold that he's not entirely or by any means irretrievably gone into said behavior as the series begins and develops, because he still has a surprisingly well-developed capacity for love. He genuinely cares for his daughter, for example, and would have been incapable of returning her to Cardassia Prime and suffering the loss of his position as a gul for her sake if this were not so.
Rather than labeling Dukat a sociopath, pure and simple, I'd hold that his "case study," as it were, is far more nuanced and complex. Rather than simply not recognizing the rights of others, as with the true sociopath, Dukat constructs elaborate justifications for his acts, because on some level he recognizes their monstrous nature/consequences and must thus disassociate himself from primary responsibility for their execution---no pun intended. To me, he's justifying his evil, as opposed to simply being incapable of seeing it as evil.
So it's your position that the death of Ziyal simply removed the last veneer of artificial civility and vestiges of sanity that Dukat had managed to retain over the years, and that the subsequent descent into "looney-toon"-dom was a reasonable portrayal in that light? If so, I understand, though that doesn't in the least work for me as good writing.
In short: For me, so long as Dukat was evil in a human sense (as opposed to channeling/being inhabited by demons regularly), he possessed layers, and was extremely interesting---for those who are evil have the capacity for either redemption or damnation. Once he was just a nut/possessed, I grew bored. From a literary perspective, evil can be intriguing. EEEVVVILLL is tiresome.
