I recently watched the episode Cigarette Burns from the Masters of Horror tv series. This disturbing 1hour story was directed by John Carpenter, and written by Mick Garris, Drew McWeeny, and Scott Swan. The story involved the fictional lost film La Fin Absolue Du Monde (The Absolute End of the World), the viewing of which turns its audience into homicidal and suicidal maniacs.
Cigarette Burns has a very Lovecraftian feel about it. A theater buff who owns a small theater is hired by a cinephile to find this legendary film. When it premiered at a film festival, the audience went nuts, killing one another. The film was supposedly destroyed, but in fact has been making rounds of small showings, always with disastrous results.
I loved and hated the film. I loved it because I think it was the most faithful adaptation of Lovecraftian type horror I've ever seen. I hated it for the same reason. It is a disturbing movie. It is as close as any movie I've seen has come to giving me "bad dreams". I really don't like watching cruelty on film, and there is certainly cruelty here.
This is an interesting point for me to make. I love the old Universal Horror films. I like Hammer Horror. I hate Freddy, Jason, Friday the 13th, Texas Chainsaw Massacre, and Saw. I have no desire to see Hostel. Even though I've worked on movies doing gruesome special effects (in one movie, I blew into one end of an aquarium tube full of blood to make blood spurt in a scene where a Clown gets his throat slit), I really don't like gore, particularly when it is portrayed in a realistic brutal way.
I think with games, as well as movies, one has to pick their battles. You have to decide just how much cruelty you are going to depict, describe, and revel in. As an example, I think having PCs captured and forced to watch one another being helplessly slaughtered goes way over the line, not for any concerns about railroading, but because players should not be subjected to such an experience. It is one thing for a player to choose to have their character knowingly face danger and risk death. It is another to expose them to true monstrosity.
I don't think it is too much of a spoiler to call La Fin Absolue Du Monde a "snuff film". If you dont' know that that is, count yourself fortunate. It is the particular victim in the movie that makes the watching of the fictional film a supernatural experience. It is simultaneously a cool and horrific concept. For me, it gives what feels like a genuine peek behind the curtain of forbidden lore. And it is as close as I care to get.
So, if you are looking for something less on the cheesy side, and more on the disturbing side for your weird horror stuff, Cigarette Burns might be a good choice. But only if you aren't prone to nightmares.