Underrated hidden gem disco elysium

Hellblade: Senua’s sacrifice has to be experienced (with headphones), but it’s the best game story in terms of depicting ND and coping with grief.

Cruelty squad is loaded with bad vibes. I don't think the vibes could get any worse.

You could try Pathologic if you never played it. Ideally the classic HD version, but 2 is also really good

Returnal?

Games I would recommend:

Lunacid- it is a dungeon crawler inspired by old fromsoft games like kings field and shadow tower

Northern Journey- It’s a strange, lonely, game with lots of arachnids that is pretty fun and beautiful.

Pseudoregalia- it’s a 3D platformer metriodvania inspired by both Mario 64, dark souls, and hollow night.

Have you tried the Resident Evil remakes?

Shadow of the Colossus?

Wait, is saying the name of the game a spoiler? XD Also maybe there isn't enough story, but there are certainly (ever-worsening) vibes.

Based on the fact that Drakengard is on this list I'm gonna assume you've played Nier Replicant, but I'm gonna recommend it just in case you haven't.

Other than that, while I wouldn't say it has bad vibes, Dragon's Dogma's story goes to some weird places by the end that you might like.

BioShock. I've only played the original and thought it was pretty good.

If you don't mind visual novel type games then 9 Hours, 9 Person, 9 Doors is another good one. There's another two games in the series too (Virtues Last Reward and Zero Time Dilemma). Another one is Paranormasight. Recently played it and it's a short play, about 10 hours.

You kinda hit the peak of bad vibes with drakengard and signalis. I can't think of any games even near to the levels of pure hopelessness.

Amnesia and penumbra are fun, especially the new amnesia the bunker. Cryostasis is a very unique experience. The sinking city is fun if quite light hearted in its approach, personally feel that's quite an underrated game.

Omori might be something to look into. Fromsoftware games generally have quite a despair ridden vibe, my personal favourite being kingsfield 4 because the music SMACKS

Area 51 for original Xbox is a quite literal descent into UFO conspiracy and includes narration by David Duchovny

Disco Elysium

You should try playing the Siren series on a PS2 emulator. Its basically cousins with Silent Hill and somewhat similar to Signalis in vibes I think.

I was about to recommend the Fatal Frame games if you're looking for classic survival horror recommendations but on second thought they don't really fit your parameters about descending into madness. They're more about exploring haunted Japanese manors and villages with the protagonists themselves being mostly blank and static.

If you decide to check the series out, I would recommend you grab iso files of the first three PS2 games and play them on your nightly build of PCSX2. While 4 and 5 have been made available on all modern platforms, I don't think either of them really showcases the series at its best. 5 is just a huge mess all around and while 4 is more in line with the PS2 trilogy, it's still frustratingly railroady and trivially easy.

Dead Space, the remake is good

As an aside, people here actually like Signalis? It seemed really anti-communist.

Played the Mgs games yet? Mgs2 is mostly ehst fits this but you gotta say mgs1 to get it

Ace Combat Zero: The Belkan War has that going on. It's a PS2 game, but emulating it should be pretty easy on a modern PC. It's definitely got a decent into madness vibe in the story/plot, can't say more without spoiling it. It's an arcade fighter jet game, with some great levels.