I called it a long time ago that I would love to see what Guillermo Del Toro would do with a game and it looks like THQ is letting him do it. The game is called insane and it definitely looks like a horror game. I do wish he could have hooked up with SK though and used their sanity effects. It seems like that would be a perfect fit.
It seems to have been in the works for about 6 months now and they have the main story worked out. Looking at a 2013 release... http://www.platformnation.com/2010/1...sane-revealed/