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Nightmare Fuel: Silent Hill: Homecoming
The whole of the Otherworld hospital. There are barely any enemies in it, but the level itself is enough to give you nightmares
The whole opening of Homecoming is scary as well. You awake to find yourself strapped on a gurney with doctors standing over you. Suddenly the lights go out and the siren begins. The doctors flee, one of them into the hallway opposite to you. Through the flickering lights, the dirty windows and the swinging doors, you hear the sound of something coming...something big. The doctor in the hallway screams and is lifted up by an unseen force. It's pretty obvious who it is now. And you're finally given the option of struggling free from the restraints.
Also, on subsequent playthroughs, make a note that A) You're seeing the sacrifices, and B) One of the nurses/doctors looks A LOT like Alex's dad.
The ever-downward dash inside the hellish factory environment 'Hell Descent'. Kilometer upon kilometer of warped steel, industrial fans and roaring furnaces, and creepy dolls of all things. The boss fight at the end comes almost as a relief.
The bosses in said game are some of the most bizarre and horrifying in the series.
Especially considering how the bosses came to be. Such as Sepulcher (boy buried alive), Scarlet Fitch (girl dismembered alive), Aspyxia (girl who suffocated) and Amnion (drowned). It's a pretty gruesome story, and the fact they had to kill their parents, the one who made them that way in the first place, as sacrifices is pretty disturbing.
A majority of the cell walls in the Overlook Penitentiary are littered with the writing of two or three prisoners. A very small amount of the quotes are shown (and explained) here. They seem to overlook the scariest part, though, that being that the same three men write in every. Cell. In the prison. (Despite this probably being a way to reuse the font graphics, the thoughts that come to mind seeing what appears to be the same three men scribbling on numerous cells that the others were supposedly trapped in isn't something you can sleep well with.)
...And that's along with the creepy notes explaining how they're all suffering.
"Whoever gets this message, please help! We haven't seen a guard in days. We're hungry... Losing hope... Please help us! We're dying in here" among others.
Needlers. They're basically a cross between a human, a spider, and a pair of scissors. Before you see them, all you hear is the clinking of metal against metal. Also, look for its head. It's between its legs.
Schisms, Lurkers, Siams, and Smogs are all perfect nightmare fuel as well. See◊ for◊ your◊ self◊.
Going through the Hell Descent/Nightmare Hospital is pretty freaky, but the worst bit of it had to be finding that doll... "Behind you" indeed.
Asphyxia. She's a Human Centipede.
After you cut the electricity you're ready to go running back to the prison and the game itself leads you there with a lot of monsters, but if you stay in the street outside of the power plant you will realize that a) The streets of Silent Hill have never been darker -think about that-. b) All hell actually broke lose and Schism, Ferals Lurkers and even the ocassional smog are out there to get you and if you don't have the bonus weapon YOU WILL DIE.
The infamous "Judgment" ending crosses this with Gainax Ending. Activated by refusing to both forgive Alex's father and Mercy Kill Alex's mother, this ending sees Alex captured and "reforged" into a Pyramid Head-like monster in his own right. As pointed out on the Fridge page, this ending is basically earned because Alex has been doing Pyramid Head's job for him... which then raises the question: is this a Karmic Transformation for being a sadistic monster? Or is this, horrifically, Silent Hill's way of thanking or rewarding Alex for his actions?