How about this.
SAN represents to what extent you subscribe to the vanilla model of the universe, the one with whatever god you might follow but without any of the Mythos. Diminishing SAN therefore does not so much describe madness as a reappraisal of the evidence in the light of new facts and a change in the way the universe is perceived. It was actually all mythosy all along, you just didn't know how to interpret the clues.
Now you've been exposed to the Mythos, the doors of your perception have been blown off. You see things differently. You know now that a red car followed by a blue car followed by a van has implications for the state of the world, that a perculiar smell in your sock draw portends danger and that a strange shadow on the iris of your first born is more than just a mote of dust. The GM should make occasional SAN rolls for your players and if they fail them, feed them a strange perception.
How do you know what these things mean? Well, you have to mug up on it. Cthulhu Mythos is your skill at interpreting this brave new shutterless world. It tells you that that smell is an indication that a conjunction of Mars and Venus will be a propitious time for the Mi-Go to land in Vermont, that a particular sequence of coloured vehicles is a warning to the wise to stay of the beachfront tonight. A succesful Mythos roll will give you some interpretation of the perception, a failed roll some nagging suspicion that there was more to it than meets the eye. Remember, this is the Mythos - there's no earthly reason why this has to be consistent, or logical. Greater forces are at play, beyond the ken and barbie of mankind.
As for your kid's eye, you really don't want to know what that means. Trust me.