I do this a lot, and can vouch for the general approach.
A tip from the trenches. When faced with bizarre and disturbing behavior, clinical psychologists will often verbalize the behavior they're currently witnessing. It's a way of helping the patient realize that their behavior is abnormal without moralizing or recoiling in horror.
Hence the pro-tip. Instead of getting indignant, just say something like "You're suggesting I actively undermined the project" or "you're smearing your own excrement on the wall".