I too would like to know the source for this information. I have heard this in the past but no one has presented documentation for this statement-- that the Madrid name comes from the Jewish/Israel descendants.
I do have a coat of arms( It has a beautiful Coat of Arms emblem)!that my Brother got while he lived in Spain. On it are these words written: CASTELLANO, UNA RAMA PASO A ANDALUCIA. PROBO SU NOBLESA EN LAS ORDENES DE SANTIAGO CALATRAVA, ALCANTARA, MONTESA,CARLOS III Y SAN JUAN DE JERUSLAEN, Y EN LAS REALES CHANCILLERIAS DE VALLSDOLIO Y GRANADAS. I also have been told that families that were brought to Spain from Israel were later called "Los Convertidos", because they were converted from the Jewish beliefs to the Catholic beliefs.
Please send me info on the facts so I may document them properly in my files.