Yeah, I think she's just completely lost it. I kind of even think that she might have just made up the whole story about "THE GREAT SITH EMPIRE BEYOND THE OUTER RIM".
What happens if you tell her something to the effect of "I've come back to get my light saber!". I know that there is a dialog option like this the second time you meet her.
Well of course, she probably wanted to die. She hated the force, yet she herself generated it. The bad thing though, is that now she has become one with the force.
Thanks for leaving that link, its an awesome reference. I didn't know that the Mandalorians even existed during the time of the movies. I always thought that Jango's armor looked kind of similar...