I think this resembles a little Oninakushi-hen don't you think? Or maybe another world? And yes, this seems to be yet another world with no happy end =/.
Seems like some variation on Onikakushi-hen except with both Rena and Keiichi going nuts, unless this is supposed to be from Keiichi's perspective... which somehow I don't think it is, seeing as Hanyuu is visible here.