As someone who was into this stuff as a kid, and read every book I could get my hands on, as well as a bit of academic study of the history of religious experience, I eventually grew into the conclusion:

> people with no history of mental illness and "good moral standing" in the community can have a single hallucinatory event, often with multiple witnesses and specific details common across different sightings

... yes, they can.

It's not a mental illness, it's "pareidolia" or something similar. The "face on mars" is a great example. The brain is a pattern-recognition neural net. It's really good at finding patterns. So good that it finds patterns which aren't there. Occasionally they can be really strong.

Spookily, while typing this post, I saw a bright oval dot moving at high speed across my peripheral vision, outside the window. Just before it disappeared from view my bleary eyes resolved it as a seagull, being under-lit by the dawn light against houses and trees that are still in shadow.

(I think we'd do well to recognize that there's no sharp boundary between "sane" and "mentally ill" either, and that "mentally ill" should not be used to automatically discount people! Schizophrenia is known to produce hallucinations as a common symptom, but not depression or bipolar, while migrane headaches can produce flashing lights in the field of vision but are not usually classified as a mental illness)