Well sir, if you don't see a supernatural side then I guess Gordon and Hank both caught mental illnesses at the same time. Wouldn't want to be his insurance company.

And the dog. Don't forget the dog. Why do everybody forget about the poor dog?

Don Cheech, Gordon killed his wife and baby. At the end you hear the scene with the boiling water and slap again but then there's Wendy screaming and the baby stops crying suddenly. As for the room with the pictures, I think that Gordon has taken over Mary Hobb's old room as well as her sickness and placed photos of his family up.

this^
Hank was stabbed in the tunnels. Jeff was killed near the truck. Phil was murdered in that room with the pictures.
New questions: were those pictures on the wall actually of Gordon? or is that a hallucination? Is it just me .. or were there no batteries in the phone Gordon used to call his wife? Is his wife dead or alive?

Phil was not dead at that point. Phil was murdered right after confronting Gordon with his news about what Hank told him. Its very possible Hank after some prodding was able to talk to Phil about what Gordon did to him.

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Phil was already dead at this point. Gordon was hallucinating this exchange, as is seen when Phil finally goads Gordon into screaming, "I am f-cking awake!" and Phil is then seen as a dead body.
"That is terrible advice, Ant1238."

About Hank and the lobotomy, near the end when Phil confronts Gordon he says "i just spoke to Hank and he told me you attacked him" or something similar, so whats up with that?

Mike just didn't realize that he had called Jeff Princess, but yeah, he was still thinking about the Mary tapes.
We never really grow up, we only learn how to act in public.

No, nothing to do with a "supernatural element" seeping into the characters, that scene just shows that Mike is still deep in thought about the tapes, letting terms from them slip into his dialogue with the others.
"That is terrible advice, Ant1238."

Thanks for your answers! I'm very happy with the Hank explanation!!! As for the other thing, I noticed he heard princess on the tapes, but still not sure why that would make him say it and forget he said it. However that could well be the explanation, I just think it's a little thin. Thanks again!
http://soundcloud.com/dj-snafu-bankrupt-euros
Coz lifes too short to listen to Madlib

The princess thing is a sign that the one guy has let the tapes get under his skin, a.k.a the supernatural theme that is seeping into the characters, which is proven by his confused demeanor when he says princess but doesn't remember it, and the reason Hank was acting so weird is because Gordon already gave him a lobotomy, but he had already wandered off when Jeff went to get help, as noted by when Hank keeps repeating, "What are you doing here?" Instead of asking for help or asking Jeff to get paramedics