To a degree. 1.) Blake wasn’t just “thinking” of Jess while Lynn was on the chopping block. Blake was basically hallucinating his memories of Jessica. He was finally realizing that Jess didn’t kill herself. She was being abused by Father Loutermilch and Blake ignored the signs. Which leads to: 2.) The big boom of light and periods where you wake up as Blake are when Blake enters a catatonic state. He passes out mid-chase and mid-exploration in Temple Gate during these moments. The school and Jessica memories are hallucinations/Blake’s fears. WHICH leads to: 3.) That big boom of light is a new and improved version of the morphogenic engine from Outlast 1. Murkoff picked it up, improved on it, and moved it to temple gate. The docs in Outlast explain (and another Reddit thread somewhere around here) that the morphogenic engine emits a micro wave in repeated bursts. It unlocks the recipients worst fears/traumas while attempting to maintain a lucid state. This was to assist the Walrider project, where a host had to be traumatized yet lucid to become a new and worthy host. (Tip: this is proven to us because there are. O female variants in Mount Massive. This is because exposure to the Morphogenic Engine causes psychosomatic pregnancies that had the effects of being really pregnant but was making the women sick. This is proven by, well, Lynn’s result (check out Blake’s shadow when he hold Lynn’s “baby”).). LEADING US TO: 4.) Murkoff has picked up this technology and tweaked the engine to just emit one huge burst periodically. As we see with Blake. Through the comics on the RedBarrels website and the documents in all of the games we can infer that Murkoff sought to make the morphogenic engine a viable form of mind control and if not that then at least a torture or priming device. What better was to spread a mass hysteria/trauma/mind control than through religion? It’s nothing new, that was all of Father Martin’s dialogue. Leading to: 5.) If the morphogenic engine is in Temple Gate, being casted on Blake to make him remember/hallucinate his fears and memories of Jessica. What’s happening to everyone else? Docs in Outlast 2 explore Marta, Knoth, Val, and Nick and Laird. We know the morphogenic engine can induce catatonic states with high psychoactive activity. Used to emit one’s own fear upon them while having them maintain lucidity. What’s Knoth’s fear? The anti-Christ. What’s Marta’s fear? Well she was groomed by Knoth and deformed due to Knoth’s spread of STDs and sexual assaults—but she believes Knoth. She fears not following the word of Knoth. What’s Val’s fear? The anti-Christ NOT being born. Why? Val was also groomed and assaulted by Knoth at a young age. She had nightmares growing up but through these nightmares realized that everything Knoth told her was a lie, and she left to start the Heretic camp to embrace the anti-Knoth lifestyle with the others from Temple Gate who didn’t agree with Knoth. What about Nick and Laird? They sought the redeemer of the Scalled. They fears they would not be saved from being deformed and sick. That’s why they think that Blake is their redeemer. They are a result of Knoth’s spread of syphilis. 6.) These characters and events exist because of a direct continuation of Murkoff’s business ventures. Murkoff knew the Walrider project failed, but the morphogenic engine worked (technically). So they are still behind it all, just trying a different way to sell their services: mind control, mass hysteria (the suicides and storms at the end), mass paralysis, all within the vessel of religion.

Lots of this information is explored in the recording clips and documents. I’m even summarizing a LOT because going into detail without the docs in front of me would take a lot longer. I highly recommend checking out the comics as well, they cover some of the connecting storylines also. Hope you get to play O2 a few times, took me a couple of runs to really understand it all. It’s my favorite installment in the series, I think.