What could cause hysterical laughter while sad?

No one knows but: It is possible that different emotions may originate simultaneously from different parts of the brain prompting an individual to engage in seemingly incompatible behaviors. For example, sometimes very happy events, such as weddings, can bring us to tears.

Laughter while sad?: Do you do this? Or have you seen this? If someone you know does this, it may not be psychological. There are organic conditions that are characterized by inappropriate laughter when someone verbally expresses sadness or is emotionally neutral. Schizophrenics may laugh inappropriately; and people with pseudobulbar affect may laugh or cry and then tell you they don't know why they're doing it.