Mesh: not bad! best so far.
to the rest (ok, mesh too if he wants lol):
Scare me once, shame on you...
Look, if Joe the Barbarian sees the walking corpse of his grandmother, and is forced to kill it, yeah, that should effect his sanity a little bit; but the next time he faces off against a similar threat, it should have little or no effect.
Sure, some characters are going to be scaredy-cats any way you look at them; but eventually there will come a point where fear is subsided intot he mundane.
In other words: unless the experience is mind-shattering, this is just going to be an extra DC. Nobody needs an extra DC. Nobody wants a character going nuts when he has to fight his first goblin horde.
so, not to sound persnickety, (because i'd like to see this make sense, be viable, etc):
is there a way to demonstrate the slow unravelling of the mind, the instantaneous implosion of the mind, basic emotional fear, and plain-and-simple revulsion-- all from one unified, simple set of rules?
no. there isn't. fear can be accounted for by fear-inducing abilities, horror is situational, and madness is character-to-character.
good luck...
