Gathering a team of modders for a BIG mod

[Endrek03]

LOL, well, at first i thought to make it a stand alone idea, but since there's so much fiction in the original game, i thought this may work just fine.

That doesn't mean you can't fit in rich lore into your character and story instead.

And to answer, why was a mass murderer put in asylum: the head doc. of the asylum has some powerful connections and so by his wish Daniel "bypassed" the rope. Also the doc. gets more and more crazy each day, which leads him to Alexander like state.

Try this:
The head doctor of the asylum heard about it Daniels doing, or if we're doing an all new story than he simply heard of the main characters doing. He researches the mansion and what happened there while the community or whomever is searching for Daniel.
When Daniel is finally caught he is put to death immediately, but the Doctor "donates" a large amount of money to the folk or whomever caught him to take Daniel off their hands. People don't argue with large sums of money, even when it comes to mass murder.
In your game, you can include the Doctors notes explaining that he was searching for Daniel as well and how he paid the large amount to receive him. Of course, this now puts more pressure on you to figure out WHY the Doctor wants him so bad. The original idea of killing him eventually might not flesh out so well.
Still, something to work with.