I'm thinking that there should also be ways to regain sanity such as successfully establish a non solar orbit around a planet or moon, landing, and docking, that way successes will increase crew moral and failures such as parts exploding, a crewman dying, or being stuck on a ship with no fuel will lower moral. Being alone in a cramped capsule would have a detrimental effect to moral while having a few buds and more comfortable living spaces will increase moral (and delta-V costs) Having experianced crewmen will raise moral while a full inexperianced crew will have lower moral. I'm also not fond of sanity degrading if all is going according to plan, so a comfortable ship with a few experianced crewmen mixed in with plenty of delta V shouldn't have any sanity issues on their way from Moho to Eeloo, while a ship that is missing a few crew due to death and is low on fuel and filled with rookies will be in full panic mode on their trip back from Duna to Kerbin, but that crew would regain sanity once they establish a stable kerbin orbit and have a successful docking, with more once they get a better fuel situation.