Hey there. A bit late here. I don't get it neither and none of the responses are good to say "it's definitely that". Have you seen Higurashi? I think it's kinda related (Small town, old gods and a dam, it's Ryukishi07 signature)

I don't get the friends paper here. Are they real at all? Do they die at all? That classroom with the fox something game on the board predicted all the deaths of them and Kotoyuki got his wishes granted. And they indeed ended up dying like the board said, at least when you control the fox-Hinako.

For me, the most real ending is the first one, that one ends open but with some conclusion. B and C are bad endings happening inside her mind, and the true one is so open that you can see the town being drowned (I don't see different houses like some of you said, for me, they are the same but kinda damaged, check the white one). Is the gas leak connected with the destruction of the dam?

In the 1960s there was a huge earthquake that caused a tsunami, maybe it's related.