The Wise ones say that being in tel'aran'rhiod in the flesh is evil, and you lose part of yourself. Did Jordan ever specify what exactly happened? I'm wondering because Rand was a lot in the world of dreams in the flesh, and I'd like to know if part of his craziness comes from that.

I would say that the wise ones saying comes from years of not knowing.  Apparently AS did it all the time in the AOL.  Somebody (Demmy maybe?) talks about Ter'Angreal for training.  If not everyone can reach the world of dreams as a Dreamer why need to train someone; if they have the gift of dreaming they wouldn't need the TA.  Perhaps it started as only trained AS should enter TAR in the flesh and over the years became don't do it b/c it's evil.