[[WMG: The Comedy Ending is another part of the illusion created by Arthur, as a reward for Sarah.]]
Everybody's still dead. Sarah still killed them. But in order to earn the Comedy Ending in the first place, you have to play in the most benevolent, compassionate way possible; Sarah has proven herself a thoroughly good person when not in the artefact's thrall, and Arthur is forced to admit this to himself. Instead of simply offering her escape and redemption, he grudgingly creates the birthday party scenario for her, where everyone appears to be alive and happy and the previous torment is rationalized as all being part of the setup. After all, what could be a better reward for Sarah than redemption and escape from the station, to live her life always remembering what she did? The chance to die peacefully, in happiness and comfort, with the weight of her sins completely removed from her mind, of course. Arthur still set the station on a collision course, but with Sarah happily distracted by the party, she would never even realize she was living her last moments.
Evidence supporting this theory:
* Dick Lee, the only one not intentionally killed, appears with a bandage on his head. He only appeared onscreen in flashback; the only possible purpose for the bandage is to make Sarah feel better about what happened to him.
* All of the crew's personalities are very bizarre and shallow. Arthur didn't know any of them for very long (or at all, in the case of Dick Lee), and has presumably had a very long time to stew in his resentment. This might honestly be the way he now thinks of them.
* Arthur himself is present at the birthday party. However, he does not participate, and in fact he looks pretty grumpy about the whole thing.
... The karaoke guy on the asteroid is still anyone's guess.
** Alternative guess: Those really are their personalities. Think about it: if ''you'' had to spend a couple months in these people's company, wouldn't ''you'' murder them?
[[WMG: The Power of The Artefact isn't to Make Your Ideas Real; It's Really A Kill Machine With Sentience]]
We only have Arthur's word and Sarah's memories about what happened with the crew, and the game never outright says what the Artefact's power is, besides having the ability to let Arthur turn it into a semi-permanent nightmare. It's entirely possible that the machine had been the one who killed everyone on crew, and Sarah had been attempting to destroy it when Arthur became trapped inside of the chamber of the machine. She hadn't meant to kill him, but he became collateral damage in the attempt, and the machine manipulated the then-betrayed Arthur into believing that she had been the one responsible for the deaths on the crews.
The comedy end is her proving to him through her actions that it wasn't her who killed the crew but rather it was the machine.
[[WMG: The Redemption Ending is just another simulation]]
Let's face it, what are the odds of finding a paradisical planet fit for human life, yet apparently uncolonised, within pod travelling distance of the station? Considering the fact that Sarah steps into the island while on the station at one point, this seems almost certain.
* Further implied by the final shot of the Artefact whirring away deep in the forest, despite the station having exploded. Sure, it might not have been destroyed even by an explosion, but landing on the same tiny island (and upright, no less) rather than spiraling into deep space? Unlikely.
* Furthermore, it ends up on the planet after the station is set ''on a collision course with another planet.'' What, did it grow wings and fl- wait a second, thats a WMG of its own.
** What other planet? It very clearly explodes in atmosphere over her head.
[[WMG: Nothing of Arthur's exposition at the end is necessarily true]]
Sarah didn't kill the crew members. Arthur is a sadist and traps her in the simulation in order to torture her psychologically. Her "memories" of killing the crew at the end are induced by the Artefact as well, and her belief in her guilt shows the final slippage of her sanity.
[[WMG: Arthur never existed.]]
Instead, he's a composite of all the people Sarah killed. Besides "Arthur", there are four other people she killed. There are six body parts, the head and the eyes belong to the same person[[note]]After the flashback, if you look at the shower, Sarah will say "I think I saw it in his eyes, so I took his", implying she physically removed the eyes[[/note]], the torso and the right arm belong to the same person[[note]]Namely, the guy she threw in the fan. Something was "clogging the ventilation", and Sarah had an OhCrap moment and immediately volunteered to go down. She took out the torso with the leg attached and the severed right arm (the rest had been messily butchered into LudicrousGibs) and hid it in the room. That room doubled as a kitchen, and the torso fit in that fridge nobody used anymore, so...[[/note]], so there are four sets of body parts that do not belong to the same person - what a coincidence. Also, most of the flashbacks at the end take place in the places you find the body parts, and the ones that aren't are easily explained. The ventilation flashback is explained in note 2, and the cradle flashback was near the beginning, so Sarah could have had enough sense to dump the body into the freezer to dispose of the evidence, and the flashback ''does'' show Sarah dragging the body away.. Also also, "Arthur's" monologue talks about "what you did to all of us" and "''We'' have reached a verdict", implying he was not one person. The tapes and the killing-Arthur flashback can both be easily explained as the Artefact (and the corresponding dead people's souls) freaking with your mind. So, you spend most of the game running around building the single physical avatar of the dead crew, dubbed Arthur, out of their body parts so they can tell you why this is happening to you, and why they're all getting their revenge. This explains everything.
** Arthur could have just as easily said 'we' because he was referring to himself and Sarah, or the multitude of spirits inside the artefact (seen in one of that bad endings).