WMG / Hobo with a Shotgun

The entire city was driven insane by an Eldritch Abomination

The tentacles that we see trying to escape from The Plague's basement are Cthulhu's tentacles, and since he lives near the town where the movie takes place, he drove all the residents there insane. This would explain Hope Town's ludicrous, Up to Eleven amounts of depravity.

The Hobo's name is Bear.
Hence his love of bears and his random bear facts, as well as basically being a bear as his story showed.

The Plague is Daft Punk.

The Hobo gets his ammo from the people of Hope Town.

Those who supported his vigilantism but didn't want to incur Drake's wrath by openly helping him would buy shotgun shells and leave them out in public places for him to find, which is why he never ran out.

Ivan was killed because Drake owed the Plague.

Nick Bateman voices both Rip and Ivan...

The Hobo never existed.

Abby and the decent people of Hope Town finally got fed up with Drake and the corrupt police force and began fighting back. The Hobo story was only a story passed around to create a heroic figure for the people to rally behind as they took back their town.

The hobo is a long walk judge during the atomic wars.

The hobo was a judge from the early years (during the timeline of Origins) but before the bombs nuked America and Canada into the Cursed Earth. The hobo left for unspecified reasons (perhaps mental illness, which is why he can't remember) and was one of the earliest judges to take the long walk option. Order was breaking down across America, resulting in the city we see the hobo wander into. He wasn't sure about taking law to the lawless until he has to choose between the lawnmower and the shotgun, when his training and experience kicks in.
  • "Order was breaking down across America, resulting in the city we see the hobo wander into." - I hope you meant 'North America'/'the Americas', not just 'America' as in the USA, because the movie was filmed in, created by two guys from (and written by one and directed by the other), and 'vaguely' set in, Canada.

The Hobo's mistaking Abby as a school teacher is because she reminds him of someone...
Multiple times throughout the movie, the Hobo mistake a Abby as a school teacher. This could be because she reminds him of his wife, a school teacher who may have been brutally murdered. The way he is with her, and how he defends her seems to back this up. The way he is with her seems like he really cares for her and the way he dfends her is with total brutality. This could be because Abby reminds him of a wife he had who was brutally murdered. This would account for why he constantly insists she's a school teacher because he can't accept the reality of the loss he's suffered. There's the possibility that her murder caused him to snap and eventually lose everything, becoming the Hobo we see. Essentially, him giving up at the end of the film is him finally being able to "save" his wife and accepting both the truth and his death.