It is stated in various episodes that Genjutsu definately CAN harm you physically, for your mind thinks its real and cant get back to reality.(one of them was when Naruto, Sasuke and Sakura were heading for the exams through the woods)Originally posted by: Mut@t@
genjutsu messes with the five senses; sight, hearing, smell, taste, and touch. it can't do any actual physical damage. from what we've seen tsukuyomi is aimed for the the opponents' hearing, sight, and touch. i don't know about smell and touch since that's not clearly shown. it didn't do any physical damage to the actual body but it made kakashi's mind think that the body was stabbed for however long it was.
Lets say, you get shot bad and because of the trauma, you believe that your legs were shot off .. Do you really think it mathers wether your legs are still on even though you could see they are ? Cases like that even happen to "real"people in THIS world. Check the news//history more often about war-casualties, vietnam etc.
Although the attack on kakashi was different, It STILL wore out his body , meaning that his whole body was activated to prevent to much pain entering the cerebral core. Meaning that the brain thought the dmg was real, meaning that Kakashi too thought it was real EVEN though he KNEW otherwise.