This is an item for spellcasters. It will appear as a large jewel-encrusted brooch of a type often used to close cloaks and capes. It will radiate magic, if tested. All checks will indicate that this item endows the wearer with the power to see invisible creatures. There is no activation process for this ability; it simply works whenever the brooch is worn.
The power to see invisible creatures and objects is real enough, and will function properly even when used out in the field, as it were. Unfortunately, the brooch will also create imaginary images of people or creatures as well, which the wearer will see from time-to-time. There is a 20% chance per day of seeing one of these delusions.
The images will often be of various people, animals, or monsters that the wearer has encountered before; most especially, ones that got away, or are still believed to be living. They will seem to be following the wearer and their party, and will flee, or attempt to, if noticed.
Characters may try to reveal them through other magicks, or attack them in this invisible state. At the GM's discretion, these attacks may automatically miss, or may appear to hit or even kill these apparitions, whichever will help maintain the delusion. Once a delusion is noticed, the wearer will see and hear the imaginary creatures, no Saving Throw allowed.
The brooch can be removed, discarded, or even destroyed at any time without changing a thing: the curse is now upon the wearer. Understand that when the brooch is not being worn, or some other magical detection isn't being used, the wearer will not see any of these delusional creatures; the insidious quality of it all is that this seems plausible. If/when the wearer does use some sort of detection magic, whether from the brooch, a spell, or some other magic item, the curse reasserts itself. Detection magic of any kind used by the victim, will seem to work as normal, but will also have the same 20% chance per day of giving off false readings, revealing things that simply aren't there.
It will require a high-level Remove Curse spell in order for the delusions to be permanently removed.