Everything We Know About Who Pyro Is/Was:

Obviously Pyro remains ⁠⁠⁠an enigma and I'm not going to pretend I have much in the way of definitive proof, however there ARE aspects of their background we can reasonably assume based on the skills and behaviours Pyro displays. First and foremost, we need to understand the extent of the disconnect between their consciousness and reality. Most folks understand it as mainly auditory and visual hallucination, however if you look at side-by-side moments in Meet The Pyro, you'll realize that there's a clear disconnect between Pyro's physical stance:

What Pyro believes they are doing with their body and what their body is actually doing can be entirely disconnected. Furthermore, if you listen closely to Pyro's more comprehensible dialogue, you'll notice that what they say lines up more with what they're actually doing, and not what they THINK they're doing:

Put together, this implies Pyro possesses not just a disconnect from reality, but also a full-blown division of personality. There's Conscious Pyro, who is the bundle of joy frolicking through Pyroland, and then there's Unconscious Pyro, who is the maniacal murderer actively interacting with reality. Both of these personalities seem to play a factor in Pyro's behaviour. While Conscious Pyro clearly seems to possess a degree of control over how they act in Pyroland, the fact that all those actions also happen to be very effective methods of murder in the real world says that Unconscious Pyro is steering these decisions.

Now, these two are not ALWAYS so disconnected or extreme. When not actively burning things, Pyro's perceived reality seems to line up more closely with what's actually happening from a visual, auditory, and physical standpoint:

Conscious Pyro's whimsy and Unconscious Pyro's murderousness both seem to drastically tone down in these circumstances, however both never fully go away. Pyro is ALWAYS capable of extreme violence/destruction:

Speaking of extreme violence, Conscious Pyro DOES share Unconscious Pyro's capacity and willingness to cause harm. This implies that the difference between the personalities' behaviour is more-so the result of their perceived environments, not demeanour.

To summarize, Pyro's disconnect from reality becomes more powerful when in the presence of fire/destruction, and this causes a divergence in Pyro's perceived and presented personalities. Moving on to in-game lore, it is stated that Pyro built/improvised the majority of their weapons (mainly out of stuff found in a garage.) This is immediately clear if you look at the individual components of their flamethrower:

The primary exception to this is their shotgun, which is a standard weapon they nonetheless operate with a trained familiarity:

Building a flamethrower is no easy feat. Besides being extremely complicated and dangerous, all information regarding flamethrower construction and schematics are strictly controlled by the U.S. government. Therefore I'd say it isn't much of a leap to suggest that Pyro's ability to construct and operate improvised military-grade incendiary weaponry must have been the result of formal training.

This is further supported by the fact that their flame-retardant suit is not equipment provided by Mann Co, as they continue to wear it even after being fired. All this together implies that before becoming a mercenary, Pyro had a job that provided them with both the knowledge and tools of an incendiary specialist. This more-or-less confirms that Pyro was not ALWAYS so insane, as at some point they were considered stable enough to be trusted with such a dangerous job. Since Pyro seemingly hasn't taken the suit off since that job, it can be deduced that whatever triggered or inflicted the madness they now suffer from must have occurred during their service. It would also explain why all of Pyro's incendiary weapons are homemade while their suit is standard-issue. After being fired they obviously weren't allowed to keep any weaponry, meaning they had to construct their own.

There are a lot of ways to interpret all of this, but my personal theory is that Pyro was at one point part of some Cold War experiment. One that sought to disconnect soldiers from the reality of their actions during combat, while ALSO allowing them to operate with brutal efficiency. Considering this was the era of the Vietnam War, a way to make soldiers not feel guilty or resentful while being ordered to commit atrocities would have been an invaluable tool for the USA's military. Pyro being a highly trained candidate for such an experiment is the only explanation I can think of for how they could be simultaneously highly trained in incendiary weaponry AND be too blatantly insane to ever justify such training. This would ALSO explain why Pyro is both so frighteningly dangerous and unstable, yet still somehow employable as a mercenary. While extreme, they remain capable of understanding and following instructions from superiors. Even if said instructions have to be delivered in a slightly different manner: