2011, The Vicious Brothers -- download
Grave Encounters is that movie. It's based on the found footage idea (Blair Witch Project, Troll Hunter) but does not state exactly where the footage was found. It's about a typical cast & crew of a ghost hunting show who are doing their 6th episode. We are seeing all the footage that was taped, slightly edited for continuity and brevity. The sources are the main camera man's work, a handy cam and a number of stationary cameras placed during the production. Everything takes place in the typical abandoned closed-down asylum with the terrible reputation. Our crew is locked in over night to experience and record what haunts this place.
As expected things start out with a few jumps and scares and unexplained events. We see the combination of "to the audience" footage as well as the stuff that would normally be edited or cut, such as the reveal that their psychic is just an actor. But as things escalated the movie took a fascinating turn -- the power of the asylum is not just with it's haunting but it's ability to change reality. No longer were they stuck inside this scary place till 6am rolled around; the group became trapped in an endless night where exit doors led to looped hallways, stairs ascended to concrete walls and basement tunnels went on for days. As things got less and less explainable and they began to encounter the more and more terrifying, I found myself wrapped up in their fear, as it was evident at all times. Even the lulls were full of that sick stomach feeling of not knowing what is next. I cannot say I went as far as feeling scared myself but I definitely could feel the fear they were experiencing.
One by one the ghost hunters disappeared or were killed off by the entities and the asylum itself. When we finally end up with one remaining cast member, the host, with his dwindling battery life and all but gone food & water he is beyond fear having... cracked. He is lost in the asylum's madness, which I guess that is what the asylum wanted all along. I was left wondering, what exactly did the caretaker find when he opened the doors that morning? And what did the producers think when they found literally days worth of footage to watch through.