I Actually took this from my old Silent Hill site - Obviously with Origins being out - this will probably be completely changed! I haven't finished Origins yet, but will soon. It's still kind of cool to have these original theories to see if I was right or not o.o

<---Start Old Theories--->

Now obviously the game silent hill leaves a lot out! It almost leaves you sitting there thinking,"What the hell just happened?!" I have sat and thought about this while playing the game, after i beat it, and after i beat it again. I still don't completely get it, but here are a few theories of what it IS about.

Theory #1- Harry is actually dead and this is his hell, happening over and over again. Think about it, you never actually beat the game, because it just keeps going onto the next fear. Also the ending when Harry wakes up in his jeep makes you wonder if it wasn't just a dream...hmm.
Theory #2- Harry is hallucinating and killing off Silent Hill's population, hence why Cybil can't find anyone. This theory makes the least sense to me. If he were hallucinating, how come some people appear as demons and some appear normal(dahlia,lisa,kaufmen) Then again, there is that part with Cybil at the fairground, which really makes you wonder. Because, if Cybil was normal..then turned possessed. Then there is lead to believe Harry was halucinating her being possessed and then relising what he'd done..after splashing the aglophotis on her. I don't know like I said, this makes the least sense. It does make you wonder though. If Cybil was normal then turned possessed. What made it happen? Did this happen to everyone else too? If he had spilt the aglophotis on a demon would it turn into a child or human? Who knows...
Theory# 3- Ok, this is the most plausable. Dahlia is part of a religion aside of the church that put that drug "White Claudia" which is a halucinagin, into their services. This makes them go insane and totally 180 their religious practicing to evil. They turn power hungry and dream of bringing forth their god, Samael. But seem to think they need to wait. Either to get more followers or more control.  A little while down the road the city quickly grows and more people move there. The cult starts to lose their grip on the town and goes underground, occasionally sending demons to kill off important officials.

Dr. Kaufmen is directot of the hospital and is quick..so he catches on to the cult and makes a deal with Dahlia to distribute the drug to his patients in exchange for power(i'm not sure what exactly, but they were definately in on it together) So, Kaufmen starts distributing it to his unknowing patients..and the cult regains control..for the most part.  At some point Dahlia decides to give birth to Samael, which they did in some ritual..and she had Alessa. Alessa only contained half of the demon soul. So, they decided to wait..to see if it would come forth in her. It didn't..so they decided to try again. This time Cheryl was born. With the other half of the demon soul. Alessa knew of Dahlia's plans to merge them to get Samael,and didn't want it.

So, possibly, Alessa kidnapped Cheryl and brought her to the cemetary, (where soon after Harry and his wife found her) then returned and they maybe burnt her to get it out of her..or she was caught in a fire..or something. So, they need her to stay alive so they cast a spell and keep her in the hospital basement under the care of Lisa Garland. She stays there for 7 years..and Lisa starts getting freaked out (the videotape) She couldn't quit becuase Kaufmen gave her the drug, white claudia, which she was addicted to. Alessa stayed there having nightmares for all the time..and Samael was feeding on her torment..getting stronger.   

So Harry comes to town with Cheryl and Alessa(samael) senses his other half's presence and immediately awakes and sends a form of herself to crash Harry's jeep so she could get to Cheryl. He gets Cheryl..and maybe possesses her body taking it over..becoming Alessa/Cheryl..hence how you see her running from you..it's cheryl's size with alessa's shape. Anyway, Cheryl is now gone..and Samael has taken her over. The explanation of the monsters..is kinda weird. It could be either all of Alessa's nightmares came to life..or all the townspeople that took the drug turned into monsters. Whichever you want to believe.    

Harry goes through the trials of Silent Hill chasing after a ghost of the former Cheryl, who is trying to guide him to the truth. Hence, Cybil seeing her floating over the gorge where Harry had to go next.  

Kaufmen is pissed at what has happened and made a back-up plan called aglophotis, which is supposed to extract evil.  

Dahlia uses Harry to use the Flauros on Alessa/Cheryl/Samael, because it would know to expect it from her, but not Harry. Having it controlled would mean Dahlia could force it to do her will.  

Cybil gets in too deep..and perhaps either samael or dahlia possesses her to get her out of the way. When Harry chooses to use the aglophotis on her..she is back to normal.  

Lisa was just as she said..like the others but hadn't realised it. Maybe she hadn't realised because she was so impartial to what had happened...who knows. Good freaky element though!  For more anaylisis go to the endings section