is chief crazy? is he a trustworthy narrator? did the events he narrates really happen? is nurse really all that bad?

I think Chief is the most sane in the story, probably more sane than the "sane" people. Chief is a watcher. He pretends to be deaf and mute in order to soak up all the information. This information translates to power. That's pretty smart. I think Chief is a pretty reliable narrator, he really has nothing to exploit. Yes nurse ratchet is that bad. She is an aggressive malicious power freak that needs to be a patient more than a nurse.