Yup I was exactly the same, died the first time it happened because of the dropped controller and scrambling to fight back. Then I remember avoiding that section of the game from that point on at all costs. Yup never finished that damn thing either.
I wasn't a fan of Fatal Frame/Project Zero franchise, but playing Maiden of Black Water it gave a lot of nightmare fuel. The ghosts coming out of nowhere making these weird noises, the VHS flashbacks you see when you touch the ghosts are all disturbing stuff. You have this weird ghost girl with the umbrella that does nothing but stands there. She doesn't attack you, doesn't react to you, just standing there like she's in My Neighbor Totoro. But I think the creepiest, and I mean the creepiest ghost in the game was this giant woman with the hat and this slasher smile. She pops out multiple times and no matter what I do she keeps coming back. And this part where you keep watching the shop via security cameras was also unsettling. This scene when you go meet the final ghost is also uncanny, like it came out of Instrumentality. I've always had the belief Asian horror is scarier than American horror, and this game is another example of that.
Finished FF2 Monday night. Played F.E.A.R for a couple of hours on Halloween. Sure was fun. I still have several horror games I have not played. I can't believe I didn't have a single nightmare through out October. I keep a journal near me for what dream I had the night before. Now,. Head back to getting a replay for Metroid: Samus Returns.
The remake of Doom on the Xbox was very eerie atmosphere. When it goes from a normal military installation to a house of horrors in a snap.
This one isn't overly scary, but for unsettling creep factor, the scene in Outlast where the one guy is making men into women by ramming a circular saw into their crotches, then you get to experience it first hand, is downright... unpleasant.