I'd use a comma in that remark even if it was uttered quickly. For me, commas are functional marks that help readers understand a sentence. I don't pay much attention to dramatic pauses, etc., when I use them in my own writing.
But that is still two syllables, and can be read with a minimal or non minimal space between them, even if written with no actual spaces. That seems to be the issue. It is obviously a transcription of a conversation, so the reader needs help on the pronunciation, spacing, tone etc.I don't think it can be the first one, because "what" and "are" have become a single unit in "what're."
The reference to "psycho" alone indicates that this is not an attempt to write the most polished and scientific English, but an attempt to represent spoken English, with our without commenting on the speaker's grammatical imperfection; and standard English writing is always an inadequate tool for representing speech patterns accurately. I understand What're you a psycho? to represent the sentence spoken without breaks, and possibly, pace entangledbank, without changes of intonation. In my experience this can only mean option 2.What're you a psycho without punctuation can be interpreted in two different ways:
1. What! 'Re you a psycho?
2. What're you? A psycho?
Admittedly the difference in meaning is slight, but failure to indicate it is lazy. And impolite because it forces the reader to do the writer's work.