My point is this. Fallacy, in my ignorant opinion, can derive from two sources. Ignorance and insanity.
Stay with me here because I am going to challenge what you say without disagreeing categorically. There are actually at least 3, and I would argue 4 sources of fallacy. Also while I agree with calling the most common form ignorance, the second might better be termed 'irrationality' rather than insanity, because insanity describes a somewhat extreme state and in fact the most common aspects of irrationality are as you suggest, forms of denial. It is behavior that is often being simply "unreasonable' rather than exemplary of even neurosis, let alone psychosis, which also produce fallacy but in the less common and more extreme manifestation.
The problem with irrationality is one of degree and some aspects of irrationality also come from 'subjective'states of being, in other words individual perception. This leads to or can stem from, a third common form of fallacy based on sensory perception, as it is more commonly known; illusion. This is sensory deception.
However, going back to irrationality, it is difficult because we are actually hard wired to "believe" what we do not know (the roots of this are in evolutionary psychology), hence issues of 'faith'. We have faith in what we do not know. Faith is at best benignly non-rational and at its worst psychotically irrational, but these aspects of the human psyche lead to what I call the fourth form of fallacy a type of intentional deceit.
There are two commonly agreed upon forms of reasoning; deductive and inductive. I argue there exists a third form of reasoning designed not to 'prove' but to 'convince'; seductive reasoning. This is a charismatic feature of human thinking and communication derived from our mating behaviors, which over tens of thousands of years of social evolution developed into a much more important social construct first through religion, then through politics, and today through commercialism.
The memetic power of seductive reasoning is the essence of charisma and the charismatic power of priests, politicians, soothsayers, salespersons, psychopaths, con-men and pimps all share this characteristic. They are those among us who like Helen of Troy, can launch a thousand ships with a smile.
Truth and fact start to fade rapidly from view when a spin doctor can convince you to see not what is there, but through the lens of what you wish to be there, what they in fact are manipulating you to believe.
When simply a pleasant passion play concluding a dance of human courtship, this assisted form of mutual self deception can be accompanied by a rosy glow, which sadly all too often fades in the clear light of the following day. However when it is about politics, it can lead to the downfall of a people or the rise of empire. History's greatest villains and most illustrious heroes have the trait of being charismatic in common.
The irony of their very real power is that it is predicated on a prevalent form of fallacy that humans are hardwired to respond to by substituting wish fulfillment for reason. We suspend reason and accept as articles of faith because of how someone makes us 'feel' rather than understand.
Rational deception is the basis of seductive reasoning and by deception I am asserting an 'intent to deceive,'(even when rooted in self deception) hence a fallacy of intent designed to gain advantage over others for personal gain, principle, or even in some instances for the 'victims' own good through a distortion of fact.
Doing the wrong thing, even for the right reasons, is still deception after all. Isn't this how we got the expression: "the road to hell is paved with good intentions"? Or as Murphy might call it, the "Law of unintended consequences". Nonetheless our genes don't care. Perhaps that is why Dawkins called them "selfish" and seduction is an expression of genetic purpose that today has evolved its own memetic mechanisms of social preservation but it's still just fallacy and the emperor is still naked.
