You can go to the population screen and cast him out. Then you can assign him to an chain
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STRIKE THE EARTH!
I've been doing some thinking. Can this be salvaged? Can the dwarf be cured?
No, insanity is permenant
Maybe dig a room with a door, make a burrow there with only the crazy guy assigned, tell him to go there and the lock the door? Never tried this though.
I have about 20 goblins in cages with no idea what to do with them. I’ve been stacking them in a room like a goblin zoo.
I found it easiest to build a drowning chamber.
Build a room you can easily flood and drain. Place the cages in that room. Connect each cage to a lever outside the room. Lock the door so no dwarves get in, flood it, pull the lever to release the goblins, drain the room when they're all dead.