Cool idea.
Would be good to put the controls in the game somewhere.
I couldn't figure out how to get out of the castle. I got the key but I wasn't sure what it opened. I think I tried everything. It also didn't seem like the ghosts affected your sanity at all, but they did chase me.
Wasn't sure what the point of being able to turn of the red lantern was. Toggling it seems superfluous. Without it on you can't see the ghosts and they just block you.
Needs sound!