When a TV character is meant to be completely, irretrievably unhinged, and it's inconvenient (as it would be in 95% of television scenes) to have them exhibit typical deranged behavior such as detached wandering, violent outbursts or obsessive drawing/crocheting/self-mutilation/etc, the general method for conveying their insanity is to have them constantly spout rambling incoherent phrases, e.g. "The avenue is clear and we must use it to convert the extra limbs - not yet though, not until the pastor has been distracted, or do they have the right parts? White fish elephant man which was lettuce matrix!"
Quite transparent and distracting, for the most part.
Talkative Loons can sometimes actually be misunderstood Waif Prophets; it can be hard to tell the difference between the two. If the talkative loon happens to be a beautiful young woman, she may also be The Ophelia. Occasionally some Infallible Babble might slip out of them, but Sturgeon's Law applies to the remaining ninety percent, and there's no way to tell which is which.
Talkativeness that takes the form of a single phrase repeated ad nauseam is a Madness Mantra.
Note that this sort of behavior is a real symptom of certain real mental illnesses, particularly schizophrenia (psychiatrists call this kind of talk from a schizophrenic patient "Word Salad") but it is far from universal, even in schizophrenics. In the real world, the insane do not, as a general rule, identify themselves quite so easily and conveniently. Of course, they might not be crazy. Just brain damaged and might be suffering from aphasia.
See also Word Salad Philosophy, Cloudcuckoolander, and your average porn spam. If they're the main character, try Through the Eyes of Madness. A similarly disjointed title is a Word Salad Title; the musical equivalent is Word Salad Lyrics. Can often be caused by Intoxication Ensuing. The babble they spit out might include an Ice Cream Koan occasionally.
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Graham Spectre from Baccano, who combines this with Warrior Poet. Damned if we know what the hell he was talking about half the time.
The Light Novels introduce Christopher Shouldered, a murderous homunculus prone to melodramatic monologues on innocuous things like nature and umbrellas.
"Umbrellas are incredible. I daresay I respect them, yes. Think about it: The umbrella is the pinnacle of mankind’s collective wisdom, the result of its effort to block the great natural phenomenon known as rain. More than any other part of technology, this must be a clear symbol of defiance against nature. I suppose clothes might be up there too, as a way of fighting against nature’s changes in temperature, but they’re seen as so essential that they don’t feel very defiant, wouldn’t you agree? But the umbrella! Now, that’s a different matter entirely. Can’t you feel the will of the person who made it, shouting ‘I shan’t let you get me wet, you damn rain!’ at the heavens? And so efficient as well! Who would have thought a frame of wire and a little bit of cloth would be able to stand against rain, that which soaks everything on Earth?”
Kaizo from Katteni Kaizo has a tendency to spout weird and ridiculous things that only pertain slightly to the situation at hand.
Several points in Paprika, when characters are being pulled into dreaming even while awake, they recite non sequitur phrases in a loud and usually delighted voice. When the dreams get out of control, this phenomenon affects part of a city, driving its members to form a parade.
Excalibur from Soul Eater. Trying to hold a conversation with him is not only an exercise in futility, but also highly frustrating.
Excalibur: My mornings begin with a cup of coffee with cream at the café. My afternoons begin with a cup of hot tea, with two lumps of sugar. And my evenings- Black☆Star: -Let me guess, booze? Sounds right for an old guy like you- Excalibur:FOOL! In the evening, I change into my pyjamas!
Crona is usually very quiet, but tends to ramble a lot when especially stressed.
Starman of the Justice Society of America (formerly Star Boy of the Legion Of Super-Heroes), who actually lives in a sanitarium, though he has his moments of lucidity. Apparently he'd been schizophrenic from the start, but had the benefit of 31st-century medicine when he was a Legionnaire that completely suppressed it. It doesn't help that he has knowledge of the 21st century from a historic perspective, or that Dream Girl filled his head with prophetic information, or that time travel can screw with the sanest minds. Or that he's one of the few people who can navigate the newly formed multiverse.
Marvel antihero Deadpool is one of these; it's at least partially due to Medium Awareness and it's one of his combat tactics. Opponents get distracted because he never stops talking.
Just how much of it is deliberate and how much is him actually drifting off varies from writer to writer, but it's almost invariably some combination of the two.
Daredevil villain Typhoid Mary, especially when written by Brian Bendis, has lines such as "No, you're the shmoopie," and "it's the spiders that make me horny." She also sings a chilling rendition of Monday Monday while slaughtering mobsters.
Incidentally, when she got a crush on Deadpool in his first ongoing, she freaked him out.
Circles! Circles of life, circles of death, circles of pain, circles of love, circles of power, circles of fire, Tell him about the circles! Bood Lood Cellar Door! The null mutant will be inactive at all temperatures!
Of course, that was Ultimate Green Goblin who is not only psychotically insane but at the time was also completely fucked up on his own Oz formula. Half of the above dialogue was him ranting at Spider-Man, the other half was the voices in his head talking to him.
The main character of the Doom comic book. Sample quote: "Knock knock who's there ME! Me me me me me me me me." It gets worse.
"At this particular moment in time I don't think I've had a healthier or more deeply felt respect for any object in the universe than this here shotgun..."
Another talkative loon is Mrs. Tachyon from unrelated series Johnny and the Bomb, who used Ole Ron's catchphrase on at least one occasion (though she isn't actually mad. It's just that her mind is everywhere and everywhen at once. Her thoughts are apparently perfectly lucid).
The Bursar of Unseen University has been known to turn into a talkative loon after overdosing on his nerve medication, saying things like "Why, certainly, I'll have your whelk! How do we do it? Volume!" while waging war on The Fair Folk.
Hex, a machine, can go into such nonsense typing whenever he's not working right - including error messages like "+++ Divide By Cucumber Error +++ Please Reinstall Universe And Reboot +++"
Its catchphrase "+++ Redo From Start +++" looks like another example of this, but is actually a Shout Out to a very obscure and badly-worded error message that was occasionally returned by 1980s home computers.
Flipping it around, HEX once managed to get a lucid remark out of the Bursar during one of his downswings when Ponder programmed it to behave like one of those "therapist" computer programs, and it repeated the Bursar's gibberish as though it was a coherent statement it wanted the Bursar to expand on. The Bursar accused it of making fun of him, and Ridcully cheerfully declared that it had "out-Bursar'd the Bursar".
There was a darkly hilarious Stephen King short story, Lunch At The Gotham Cafe, about a waiter who starts talking like this and trying to stab the diners.
That dog of yours is so much rage. All the radios of Coney Island don't make up to dat dog, you motherfucker!
I rot you, you abominations! I rot you and all your trulls!
Brandon Sanderson's Alcatraz Series has a character whose magic power is to talk in utter nonsense. It makes him an excellent spy, since he can arrange to be literally unable to reveal information no matter the torture without actually having to kill himself. No one knew he was sometimes delivering prophesies, and can be understood by someone wearing the proper pair of glasses. Rutabaga.
In "The Hunt" by Stanisław Lem, a lunar mining robot was damaged by a meteor shower, causing it to go on a berserker rampage. It also broadcasts a radio signal, which consists of random mining-related phrases:
"Aximo-portable talus! A wall with encystation—repetition from the headland unneccesary—the access at an azimuth of—multicrystalline metamorphism…"
In Piers Anthony's Prostho Plus a number of important citizens from an alien race started talking like this when a tarnish buildup on their fancy new gold inlays interfered with the electronic signals sent by their silicon teeth.
Solomon Shafto from The Pyrates, with a hey-diddle-die-hey-diddle-fol-derol-do.
In Monty Python's Flying Circus, the E. Henry Thripshaw's Disease sketch. "And the thing about saying the wrong word is, A, I don't notice it, and B, sometimes orange water given bucket of plaster."
Drusilla (and, briefly, Spike) on Buffy the Vampire Slayer. Also the ward full of Glory's "brain-suck" victims in the Sunnydale hospital, and Tara, who got brain-sucked late in the season and was later restored. All three examples also had some degree of prophetic or otherworldly knowledge.
Though Spike, when he was crazy, also showed tendencies to self-mutilation - trying to "cut" his soul out, hugging the cross in Beneath You, and hitting himself in Help. Hmm.
And a lot of babbling was actually just him talking to the First, who nobody else could see or hear but him.
Joyce also did this in the episode Listening to Fear.
River on Fireflyseems like a Talkative Loon, but her Waif Prophet nature means that the seemingly-random statements are actually prophetic — she just has trouble rendering her insights into something comprehensible to everyone else. (Of course, sometimes she really is just being crazy.) Also interesting in that River tends to wander around, act compulsively, and suffer violent outbursts, in addition to her rambling.
Stark from Farscape was a Talkative Loon, who later claimed that he was only pretending to be crazy, though he was still pretty unhinged for the rest of the series.
Also, the rest of the universe considers Crichton to be one as well, and upon learning that there is an entire planet where he's considered to be normal ("Erp"), Moya's crew resolves to avoid it like the plague.
In the episode "Signals and Codes" of Burn Notice, Michael is approached by a schizophrenic man named Spencer who, despite being a pattern-seeing computer genius also believes that Michael is a member of a secret group of guardian aliens fighting against the forces of darkness. At the end of the episode he's on medication and Sam's gotten him a job with a cryptographer friend of his, so the babbling is a bit lessened
Sometimes the Hybrids on the new Battlestar Galactica just babble: "Mists of dreams drip along the nascent echo and love no more. End of line."
Sometimes they're prophetic: "Find the hand that lies in the shadow of the light. In the eye of the husband of the eye of the cow."
Sometimes No Fourth Wall: "Throughout history the nexus between man and machine has spun some of the most dramatic, compelling and entertaining fiction."
Arguably, Livia on Rome. There's a scene where she and Octavian have S/M sex, and once they're finished Livia starts talking. "I like birds. But I don't like eggs. There's something quite sordid about eggs."
Or she was just bored while Octavian had sex with her. And there is something sordid about eggs. You do know where they come from, right?
The various shopkeeper/hairdresser/other-occupation characters played by Stephen Fry in A Bit of Fry and Laurie. "Good day!" "One of a goodness it is indeed!" is just a start...
"Mr. Dalliard? Mr. Dalliard, I've gone all peculiar now!"
Speaking of Stephen Fry, Peter Kingdom's half-sister Beatrice (on Kingdom of, course) has been characterized as this. Of course, she's just as likely to be eerily silent.
On Heroes, Hiro starts speaking in just fanboy references after getting his memories jumbled up. He's just about to be committed to the loony bin until Ando realizes that Hiro is attempting to tell him something and pieces the references together.
In the House episode "Failure to Communicate," a patient finds himself suffering from aphasia after hitting his head, saying a bizarre combination of synonyms, rhymes, loosely-connected words and similar-sounding words instead of the words he intends to say.
The Doctor occasionally comes across as this, particularly the Fourth, Tenth and Eleventh.
Also, from "The Stolen Earth", Dalek Caan has been reduced to a babbling lunatic, due to his warping back into the Time War to rescue Davros; the trauma destroyed his mind.
Idris from "The Doctor's Wife" does a bit of this. She's not crazy, though; she's just the soul of the TARDIS trying to get used to being human and having a body.
In the Ashes to Ashes finale, Jim Keats flirts very closely with Talkative Loonacity. He suddenly gets incredibly chatty and incredibly baffling. Likewise, in episode 6 of series 3, Thordie comes across as either a chatty, deranged Sam Tyler, or a very clever man. Although, you'll have to wait until the finale to find out which.
Myka: Do you know, every former Warehouse agent we meet is either crazy, evil, or dead? ... Hugo(on first meeting them): I know who you are. You're President Ulysses S. Grant and the snowman. You've come because it's Arbor Day, and there aren't enough zippers to go around. Myka: Well, at least he's not evil or dead.
Though one could arguably describe Hawkeye of M*A*S*H of being this all along, he became this, in spades, for the first few parts of the series' finale. At one point, B.J. realizes Hawkeye's past talking to once he starts rambling about kids' booties.
An episode of Star Trek: Deep Space Nine has the entire cast succumbing one by one to a virus which causes them to speak this way. At first it's just funny, until they can no longer run the station properly due to being unable to communicate with each other, and it's also revealed that the virus is potentially deadly.
Omar White from Oz, although much is insanity and how much is just an inability shut up is open to debate. Even so, the inability to stop talking even when you know what you're about to say is going to land you in trouble is probably indicates some kind of mental problem.
The Xaositects, or Chaosmen, one of the factions in the Planescape setting for Dungeons & Dragons, talk in "Scramblespeak", where all the words are mixed up. Except when they don't - if they always did something, that wouldn't be chaotic.
Interestingly, some of what Ophelia says does mean something. When she hands out her flowers, each one is symbolic of various things. For example, violets were symbolic of innocence and she explains that they all vanished when her father died.
Also, see this clip from the Canadian series Slings and Arrows, in which director Geoffery Tennant attempts to explain to actress Claire that her dialogue is not merely a bunch of "nonsense songs".
Hamlet himself invokes this trope while feigning madness.
Subverted and played straight in King Lear. Edgar protects himself from a mistakenly vengeful father by pretending to be a mad-man and raving about "the foul fiend!" Lear begins to babble as his daughter's abuse drives him farther into madness. The Fool is the "Only Sane Man" except perhaps Edmund.
Vezon: Where are we going? Why are we going? Are we going at all, or just sailing in a big circle? Or is it a spiral? I went down a spiral once: a big stone tunnel that went down and down and down, and ended in Zyglak. Whoever built it had no decorating sense at all.
There's a guy outside one of the safehouses in Grand Theft Auto IV who can rant for quite a while without repeating himself. "They put robots in the drinking water!"
"The pickle nation will rise again! The chickens will perish!"
The daedric prince Sheogorath, ruler of the Shivering Isles in The Elder Scrolls IV Oblivion is a decent example. While he's capable of somewhat coherent conversation (He's the one giving you missions, so the specifics are usually decipherable), he's prone to outbursts on completely random tangents.
Worth pointing out that Sheogorath is the daedric Prince (Read: God) of madness. Many of the residents of the Shivering Isles (his realm) are Talkative Loons. In fact, check the entire Madness Tropes section, theres likely someone embodying it in the Isles. The Talkative Loon of the Isles, in this case, would be the beggar Bolwing. ("I'll kalikrak the findoo, I will. You terratet it! Gal bursten it...Raney Roo! Raney Roo!") Unless you get Big Head's fork or become Sheogorath, in which case he becomes comprehensible, and indeed, quite eloquent.
Also, Morrowind has Telvanni Councilor Therana, prone to incoherent, mind-numbingly long ramblings about random stuff from her early years. Entertaining... only problem is, in the main quest, you need her vote to become the war leader of House Telvanni. )
Liz and Ard from Wild ARMs 2, although arguably this is due to an abysmal translation rather than the characters actually being crazy. This is particularly the case for Liz; his(?) dialogue was a stylistic choice created by translating his dialogue literally from Japanese. The result is nonsensical and even confuses the main characters.
Some hobos in Kingdom of Loathing, especially Hodgman the Hoboverlord, whose dialogue is randomly generated. A sample:
"Which... PORCH swing? Tell me which porch swing. Growl... Where's... The Pope?"
In Baroque, the Horned Girl at first appears to be a Talkative Loon, saying random things, like accusing the seemingly-mute lead character of saying what she's thinking, or complaining about her twitching eye. It's actually something much, much more disturbing. She's actually saying what the main character thinks in her presence; she doesn't have any thoughts of her own or a sense of self.
Albedo from Xenosaga. He makes many biblical and literary references on varying topics, particularly in the infamous "Ma Belle Pêche" sequence. What's worse is that he actually has a point and it is not entirely mindless ramblings when looked deep enough.
Anyone with a mic in an online game falls into either this, actually trying to play the game, being an idiot, being a douche, mic spamming, or being drunk/high. Loons are generally the best ones to encounter.
Oghren from Dragon Age: Origins may not actually be a loon, but damned if he doesn't sound like one on many of his drunken tirades.
Oghren:...But that dog ruined it when he stole my pants. Well, I'll show him! I don't need my pants anyway!
Warden: Oghren, you're wearing your pants.
Oghren: But the dog doesn't know that. It'll be his sodding downfall.
Boyd Cooper of Psychonauts. While perfectly capable of carrying on a lucid conversation, when he's not actually doing that, he's constantly muttering to himself, because he's trying to work out all the connections in his conspiracy theory, and the inside of his head is the only place he's got left to write on.
Boyd's rambles are actually the result of a lot of separate phrases being randomly selected. Stand there long enough in idle and you probably won't hear him make the same connection twice.
In Jables's Adventure, the majority of the mushrooms in the forest spout nonsense like "If your hand is bigger than your face, you can go to outer space!" But a few of them are a little more helpful, like the one who informs you, "Contrary to popular belief, mushrooms don't make you super, they make you crazy. Ahahahahahaha!"
Jack Lupino in Max Payne is like this due to being stoned out of his mind on designer drug Valkyr.
Hatoful Boyfriend character Anghel Higure hallucinates and talks purely in fantasy-cliches, imagining himself to be a fallen angel and the player character to be a reincarnated goddess pursued by demons, particularly the evil wizard in the infirmary. A surprising number of the things he says are accuratemetaphors for the plot points of the "Bad Boys Love" route.
Left 4 Dead 2: Ellis, who tends to talk about his friend Keith while blowing the brains out of zombies.
The psycho bandits from the Borderlands games spout semi-nonsensical threats like "Time for my pound of flesh!" or "You're going to be my new meat bicycle!" as they attack.
On Homestar Runner, in the Strong Bad Email "caffeine", Strong Sad becomes a hyperactive Talkative Loon after Strong Bad slips coffee into his orange juice, saying things like "I don't even watch football! I can't remember my legs!" and rambling about "wood-davers".
Homsar: Hi, Wonder Mike! I'm Homsar, the captain of the gravy train. Climb aboard — I've put my best foot flowered. Pshoooooo!
There's also Senor Cardgage (with the 'Senor' deliberately mispronounced), who's basically a malapropism-prone creepy old homeless guy who resembles a tall, pot-bellied version of Strong Bad with a bad combover:
Senor Cardgage: Alonzo Mourning to you, Myrtlebeth. Say hello to my tacklebox.
The aforementioned Homsar and Senor Cardgage even indulged in a competition on that very topic in fan club. The loser, following a contest to see who sold more merchandise in the Homestar Runner Store, was Senor Cardgage.
The penalty for losing was having to make a coherent statement.
He finally made a coherent statement on his third try.
Senor Cardgage: Grape....Soda...Banked?
Strong Bad's Cool Game For Attractive People has a different take. After tinkering with some ancient artifacts, Strong Bad is able to have an actual conversation with Homsar, and it turns out the loon is actually an eloquent speaker and quite intelligent in his native tongue. Strong Sad, however, just hears both talking in gibberish.
Another such character could be the Drive-Thru Whale, a disembodied drive-through speaker that spouts nonsense like "Sever your leg, please, it's the greatest day," and "Pour gravel on your stump please, ma'am." (over a bunch of static, naturally).
petey is like this on the toad show. He is always yelling random words that only he knows what they mean like "I can flack the majjiger" and "i derfted macow". 
No Need For Bushido has a blind Taoist potentially world-ending priest, who often speaks in platitudes like, "Just as the snake, once stripped of its slippers, is helpless to defend itself from the ever-growing Viking threat."
Girl Genius has Tarvek Sturvoraus babbling in the grip of a deadly fever.
In A Modest Destiny, Morris becomes one of these when he falsely believes he committed a mass murder in his sleep, and refuses to sleep afterward.
While Doctor Hobo in VG Cats is not an example, his Chaotic Neutral angel most definitely is. In the one strip we saw him: "Woof! I'm a cow!"
This cat, who is popularized on the Internet due to his constant mumblings which apparantly sound like if he's saying "Oh, Long Johnson..." as well as other random stuff like "Oh, Don Piano" and "All the livelong day."
The Nostalgia Critic is normally an insightful, eloquent-if-swear-happy reviewer. Not the case when something works him up though, chipmunk noises are often formed.
Jon Tron often throws in completely incoherent ramblings in a pseudo-Bill Cosby fashion to the reviews. Even going so far as to rate Donkey Kong Country Returns six golden bananas plus out of Shigeru Miyamoto. And this is meant to be an accurate description of what is 'Like the best game for the Nintendo Wii like ever'.
Brak, in Space Ghost Coast To Coast and The Brak Show (the full title of which is Brak Presents the Brak Show Starring Brak, which gives you a pretty good idea what he's like). Some of his favorite topics are his own name, beans, and encouraging people to "Hail Brak!", a request with which they comply with astonishing consistency.
In a previous show (Cartoon Planet), Brak is also infamous for his bizarre songs, like "I'm driving down highway 40 in my pick-up truck" - which is just this line, repeated over and over in various ways - and naturally, a song dedicated to beans of all kinds.
GIR, from Invader Zim, with gems like "Can I be a mongoose-dog?" and "Why is his head so big? Whyyyyyyyyyyyyy is his head so big?"
"It was me! I was the turkey all along! Meeeeeeee!" The fact that he was disguised as a turkey for the last one makes it abundantly clear where the "loon" part of this trope appeared.
This is hilariously subverted in one episode, when Ed finds himself with no pants on and makes a shockingly mature and insightful comment on the complexities of women. When Eddy asks if he's feeling alright, Ed promptly go back to his crazy state, shouting "HUG ME!"
In the Legion Of Superheroes episode "Brain Drain," Brainiac 5 spends most of the episode spouting Word Salad after an update of his cybernetic systems goes awry. Some of his babbling actually referenced bits of Superman mythology still unknown to Superman himself. Some of those are further obscured by word-substitutions. Other parts, however, are purely random.
A few old Looney Tunes cartoons employed this trope, particularly the ones featuring Daffy Duck. He sometimes was more of a musical loon, either singing something completely out of nowhere ("Oh I'm jutht wild about Ha-rry, and Harryth wild about meeee!") or making up his own lyrics to songs ("Oh when they say I'm nutsy, it sure givth me a pain, puh-leath path the ketchup, I think it'th going to rain!")
In Back at the Barnyard, we have a strange flashback from Abby, after Otis compares another character to the 'crazy uncle they've never had'.
Abby(lying): Right...I never had a crazy uncle...
A young Abby stands there, staring at her uncle.
Abby's Uncle: Mr. Bunny has betrayed me! We gotta close the beaches! We can't close the beaches, we're a summer town! GET THESE TURTLES OUT OF MY HEAD PLEASE! Aaand, Lindy!
We later see him singing and dancing in another flashback.
Bill Cosby on The Simpsons: Kids, they listen to the rap music, which gives them the brain damage. With their hippin' and-a hoppin' and-a bippin' and-a boppin', so they don't know what the jazz is all about! You see, jazz is like Jello Pudding...no, actually it's more like Kodak Film...no, actually jazz is like the New Coke. It'll be around forever!
Bill Cosby on Family Guy: Here I go, down the slope! Oooh, I'm goin' zip zop zoopity bop!
Wernicke's aphasia is a mental disorder characterized by an inability to understand language, including one's own speech or writing, combined with the ability to produce language that is frequently nonsensical. Individuals who suffer this condition are unable to recognize any form of language-based communication and frequently produce Word Salad which they can neither control, recognize, nor stop.
raocow's Let's Plays are filled with some of the most bizarre and surreal commentary one would ever hear. It's compounded by the fact that he's a Quebec native for whom English is a second language (although he is reasonably fluent, he does have some odd turns of phrase) and is highly prone to Buffy Speak.
Though he seems to drop it the more frustrated he gets.
The Ultimate Warrior. What makes it really scary is, it's hard to tell how much is Kayfabe and how much is serious. The reason Spoony's parody version is so damn funny is because it's pretty accurate (with the possibly exception of the random pop culture references - "You'll need an Energon cube the size of Wyoming to defeat my Autobots, Hoakogan!").
In the field of mental health, this is known as schizophasia, sometimes called "word salad". It is usually symptomatic of other serious mental conditions, including schizophrenia. Schizophasia also falls within the broader term of formal thought disorder, or FTD.
Macaws usually become this if they learn how to speak.