This had me on the edge of my seat! Very nice use of the lo-fi graphics to create a tense atmosphere. At first I felt the mouse sensitivity was too low, even in the highest setting, but I grew accustomed to it and I think it added to the experience, in fact haha
I love how you made the horror meter into a very visual thing, with the image getting more and more distorted as the character gets scared. At the end, when there is no light and all bets are off, it works very well!