His reason was despaired of

What is the meaning of the phrase " his reason was despaired of " in this context?

The young count was taken back to his hotel in such a state that his reason was despaired of. He was unable to be present at La Stilla’s funeral, which took place amid an immense crowd of the Neapolitan population.

Does it mean " he lost his sanity or he went insane (due to grief) " ?

Source: http://www.tkinter.smig.net/Romania/CastleOfTheCarpathians/Chapter09.htm

Solution 1:

"To despair of one's reason" is an expression that was found still in the first part of the 20th century (ngram) and that is no used much nowadays. It means "to have lost hope that someone will have a sane mind again".

In your sentence, as it is in the passive, it means that people (those concerned) had no hope that he would recover a sane mind.