Yes indeed, I had this kind of problem when I went to Australia. It seems that the meaning of English words aren't always the same there as anywhere else. You are Australian, aren't you ?

My oxford dictionary says :

mentality : 1) "a characteristic way of thinking" 2) the capacity for intelligent thought
psyche : "the human soul, mind or spirit"

Other nice related words to "psyche" are : psychedelic, psychic (supernatural faculty), psychopath (or "psycho", i.e. antisocial mental disorder ), psychosis (severe emotional disorder impairing contact with reality) and more...

Shall we speak of "frame of mind" or just "way of thinking" instead ?