For more details on the history, please see Doue.
Locations of InterestEdit
Kayaku's Factory--The rail system that allowed quick transport of parts around the place has become tentacles, allowing the dismembered horrors of flesh and artificial limbs to scroll across the ceiling to any part of the house the tentacles move to. All enemies will converge on the player if a part starts chattering in alarm. In order to beat these parts, the fleshy exterior must be done away with. And then there's the Hot Room, where Kayaku was last seen when the village transformed. Smoke and heat continually emit from the door.
Bless' House--Normally locked down since her father's suicide, the Regulator known as Bless managed to break into the house when the nightmare hit. It is unknown what she found, or if she is even still present within the structure.
Oto's Mansion--The only way out of the village is through the mountains, which requires the trolley to get through. Unfortunately, the only access is through the Trolley maintenance tunnel, which is connected to the mansion, which houses the now mad Oto and his bizarre instruments. For whatever reason, his piano seems to be missing.
Aside from the villagers fused with the automated wonders and those transformed into monsters, as well as Oto patrolling his mansion, there are two Regulators in the area. The first is Bless, who was in her house when the Nightmare from the All Consumer took over. The second is Cuddles, who followed his master. Cuddles is ignored by the monstrosities, and they sometimes even seem to like him. Miracuously immune to the Nightmare's corrupting effect, he is free to roam the village, and will alert the monsters to your presence if he spots you.
He has followed Bless' scent to her home...then right back out, despite the fact that she was never seen leaving out of the only entrance/exit there is. This presents strong evidence that she may have been affected by the nightmare, or perhaps that there's more to her former home than meets the eye.
http://livingbetweenwednesdays.com/wp-content/uploads/image/Covers/Red%205/atomic%20robo%20shadow%203.jpg (note how the monsters in the pictures are wearing human clothes)