My theory eliminates certain people rather than pinpoint a suspect.
So the question that's probably bugging a lot of the fans is "How exactly did Red John know about Jane's happy memory?".
One possibility is that Red John may have approached the traumatized Jane when he was hospitalized, and because he was at such a lot point in his life it allowed him to hypnotize Jane and get that information. If that is the case, then my theory is null and void.
My theory assumes that the "memory leak" occurred much earlier in his life. Red John somehow managed to hypnotize a fully functional Patrick Jane (who may not have been as experienced as he is now) and had him tell him about the memory. If my premise is true, then I believe it stands to reason to assume that Red John is much more experienced than Patrick Jane at hypnosis - which implies that he's also much older.
This is what my theory focuses on. Assuming that I'm correct about Jane not being hypnotized in the psych ward (and I admit there's nothing that really supports that assumption), then I think there's no way Jane could be hypnotized by someone who's the same age as he is. I don't think Red John is Jane's superior. I think they're equals. Red John has the upper hand owing to his resources and anonymity, whereas Patrick was a public figure and that's what Red John took advantage of. Intellectually, though, I feel they're equals.
So anyway, if my theory is correct then it should eliminate:
-Bob Kirkland
-Reede Smith
-Brett Patridge
-Ray Haffner
And leaves us with:
-Gale Bertram
-Sheriff McAllister
-Brett Stiles
Sheriff McAllister, I feel, isn't a viable suspect simply by virtue of being an extremely unknown character. I'm assuming that the writer of the show wants to deliver. It would be a let down if Red John was a character that appeared in a grand total of two episodes or so.
Which leaves Brett Stiles and Gale Bertram. I think either of them are viable suspects, but I'm leaning towards Gale Bertram.
My theory makes an unfounded assumption that Jane wasn't hypnotized in the hospital, but rather well before that, but it's all I have so I thought I'd post it.