Silent Hill: Downpour/WMG

Murphy Pendleton is really Henry Townsend.
Can't anyone see the resemblance?

Monocle Man speaks for Silent Hill.
A giant, horrific, disembodied face appears near the end of the game and asks Murphy "Did you enjoy the ride?" The ride being his entire time in Silent Hill. The town briefly put on a face and gained a voice just to taunt Murphy.

Napier is really Eddie
The first thing I thought when I saw him was "didn't I kill you six games ago?" We all know that it's questionable how much of Silent Hill 2 actually happened. Perhaps he didn't actually succeed.

The entire game is All Just a Dream for Murphy.
Okay, so there's little background about him. In my point of view, he has been placed in a coma after the incident involving with his son. Therefore, everyone is an aspect of himself.
 * Himself = Self/Ego
 * Anne = Id
 * Frank = Super Ego
 * Sewell = Shadow Archetype
 * Now that the game is out

Murphy is a Player of the Reaper's Game.
And that makes Anne a Reaper trying to stop him from winning the Game while Sewell is the Game Master.
 * Answer is

In the end,

Murphy was an orphan
Given how one of his story areas is a Catholic orphanage, is it really that hard to imagine? That said, the real orphanage wasn't actually that bad-the rundown, creepy nature of St. Maria's is actually meant to symbolize how no matter how well-run an orphanage is, it's no substitute for parents. This is hinted at in the way the orphanage ultimately pressures Murphy into an epiphany about how hollow his revenge is-the real place ultimately did the right thing, in the long run.
 * Confirmed in-game. The Nun's character biography clearly refers to Murphy residing in an orphanage, at some time.
 * Unfortunately, Tom Waltz said those menu extras weren't written with his input, so they're not reliable.

Charlie was autistic
The kid in the orphanage that was meant to be Charlie showed some of the signs that were on the list found in the monastery, which were symptoms of autism. Also, for the side quest involving the missing poster for the autistic girl, Murphy seemed quick to identify her condition despite it not being strictly specified on the poster. This troper thinks this means that he's already familiar with autism, especially in the way he talked to the boy in the monastery. If Charlie had autism, then of course he'd already be aware of the symptoms and the way to treat a child with that condition. Which leads to...
 * Wait a minute, what "kid that represented Charlie"? That kid could easily represent, and probably does represent, Frank Coleridge. And also, the missing poster explicitly mentions that Ariadne has autism.
 * The kid definitely didn't represent Charlie, since Charlie himself showed up (as a manifestation, of course) soon after. The kid probably had more to do with Murphy's general intense guilt and failure to save his loved ones.

Some of the side quests are all in Murphy's head.
The more symbolic side quests, like finding the autistic girl and freeing the birds, were part of Silent Hill's symbolism. In reality, none of these things truly existed but were created as part of his Silent Hill.

Murphy couldn't have read the rhyme in time even if he had taken it out of his journal.
The scene in the orphanage where we get a real introduction to the Bogeyman and Murphy reads the rhyme in an attempt to save the orphan boy/Charlie is frustrating because Murphy has the rhyme written down in his notes that he's carrying around, but he doesn't take them out to read it aloud. This is a really, really stupid thing to do when it's the only thing that can save the kid from the Bogeyman. But the scene mirrors what happened to Murphy's son, Charlie. Murphy had been unable to rescue Charlie from Napier,. Murphy is also unable to save the orphan boy from the Bogeyman. This just might be Silent Hill reinforcing Murphy's feeling of uselessness to put Murphy in a place where he'd be more willing to listen to the lesson that Silent Hill is trying to teach him. So even if he had taken out the rhyme, Silent Hill probably would have made it so that it was still in vain. Maybe the town made it so that it didn't occur to Murphy to take the notes out. Either way, the town would have somehow made it so that no matter what Murphy did, he couldn't save the orphan boy because the orphan boy is Charlie and Charlie can't be saved. (It might be possible that the little girl who accuses Murphy of killing Charlie might be a representation of Murphy's wife.  The scene demonstrates how Murphy had done everything he could possible do to protect Charlie, but somehow he missed something important, and that is what took Charlie away from him and eventually led to his death.