It's not the scene that's freaky (though it has its Squick moments), but the part with Dark Danny before he kills his human half. gives off a face past the disturbance scale. Oh, if looks could kill...
Danny's terrified look on his face doesn't help either.
And just before that, Danny's evil half claws Vlad's ghost form right out of him and then fuses with it. Dark Danny did some pretty disturbing stuff to his enemies.
The entirety of Danny's Rogues Gallery in the future, and all the awful stuff that was done to them. Johnny 13, the motorcycle junky, is inexplicably in a wheelchair, and Ember mentions her singing career going downhill when Dan essentially damaged her vocal chords with his ghostly wail. Not to mention Damon, Valerie's father, who somehow lost an eye and one of his freaking arms.
Vlad planned to create a clone of Danny and then kill off the original. To make things worse, after Vlad's beloved stable clone was destroyed he had a huge Freak Out moment and was alarmingly close to murdering him and likely would have if not for a timely intervention by Danny's friends. Nightmare Fuel doesn't even begin to describe it.
"...And then you will be obsolete." That episode scared the crap out of me as a child.
And then there's Identity Crisis, the episode where Technus is accidentally released from the "Level 0" glitch. Danny attempts Form Duplication to fight him, resulting in nothing short of unadulterated Body Horror (least of which being mouths for eyes and eyeballs on ends of tongues).
The "Level 0" glitch itself is a bad case of Fridge Horror at the very least. Being trapped in complete darkness for a prolonged period of time, with no stimulation of the senses and no one but yourself to keep you company? That's a Fate Worse Than Death if I've ever heard one.
Vlad's motivation for becoming a villain (murder the Hypotenuse protagonist's father so he can marry Maddie, his longtime crush, and gain custody of her children) is very, very, disturbing.
The scene where Dani melts back into ectoplasm is both a Tear Jerker and extreme nightmare fuel. Made even worse because it happens just after Danny does his last ditch effort to save her.
The scene at the end of "My Brother's Keeper" where Jazz uses the Fenton Peeler on Spectra. She literally removes layers of her youth until Spectra is an old lady. The fact that she gets older as her skin is being peeled off is seriously disturbing.
The Ghost Writer. While he was played more for laughs (and was the villain of a holiday special, to boot), the fact remains that he can take control of all existence with a typewriter, and the only thing that can slow him down even a little is when he runs into a situation where he can't rhyme. And once his typewriter is destroyed, it doesn't stop the surreal situation, it just means he can't control it anymore; Danny had to learn the lesson the Ghost Writer was trying to teach him before he could break out of his story.
When Freakshow turns himself into a ghost with the Reality Gauntlet, he really goes all out on making himself look like a nightmare creature.
To be fair, his first appearance had a scene where he has Danny chase Sam onto a tightrope with a scythe, dressed up like the Grim Reaper. Danny's smile when he tries to kill Sam really doesn't help . . .
The scene in which Poindexter first possessed Danny's body to be extremely disturbing, with the eerie green lighting, and Danny's contorting, spasmodic movements as Poindexter literally rips his spirit from his body.
The scene in "Doctor's Disorders" in which Bertrand transforms is a major example of Body Horror: his skin glows green and begins to bubble as if it were boiling, while at the same time his head rotates gruesomely before his body expands and his scalp tears off, exposing his brain.
Prince Aragon's dragon transformation can be kinda disturbing.
The most disturbing image in the series has to be Danny screaming and writhing in pain from the Blood Blossoms in "Infinite Realms." For a ghost, just being near the flowers is like being under the Cruciatus Curse. And then Vlad shoves him into the circle so that he's surrounded by the stuff, making the pain ten times worse.
How come noone has mentioned when Sam rips the head of one of the teddybears at the Gem-of-Form-transformed Gothapalooza!? I mean, all of those teddybears are turned out to be transformed goths, meaning Sam rips the head of another person!!! That means that when the Gothapalooza is turned back, there's a goth lying somewhere with his or her headripped off!!!
It's not given in the cartoon itself but Word of God is Ember died because she was too exhausted to wake up when her house caught on fire. Talk about Paranoia Fuel.
Also, think about how Danny got his powers. He is LITERALLY half-dead. That in its self is nightmare fuel.
Taken up a notch by that fact that is was his parents invention that gave him his powers.