Grand Hotel - 5th Floor
The Needler - a creature you already met in the elevator, will attack you. You can try to shoot off his head but you can also kill him with the axe. Use fast combination of dodge and attack.
After that jump over the hole in the floor and take the Health Drink from the southern part of the lobby.
You will be attacked by a Swarm here. You can also read a letter on the shelf.
The entrance to this room is blocked by boards - destroy them with the axe. Inside move the wardrobe and enter Room 507.
On the bed you will find another item for the voice from behind the door of Room 301. It's a Lakeside Amusement Park Postcard).
Take the Health Drink from the bathroom.
When you go to the west corridor, Needler will attack you. Destroy boards to enter Room 504.
On the bed you will find Pistol Ammunition. Move the wardrobe to find Child's Drawing #9.
There is a hole near the door leading to Room 503 - go through it and climb down to Room 403.
In the bathroom, you will find the last item you need - Toluca Lake Postcard.
You already have all items, so you should head back to the Room 301. You will return the same way you came here. Firstly, climb up to the Room 503. Go to the corridor, kill the Needler and go east toward the staircase. Kill the next creature and go down to the fourth floor.
Turn off the flashlight and quietly knock down the nurse.
Quietly enter the Room 407 and kill another Nurse. Go to the Room 408 and climb down to the third floor. Go to the Room 301 to get Strange Key. Open the Room 306 and jump over the breach.
Take the Pistol Ammunition from the table and save the game. Go south to the closed door, try to return to restaurant and then you will get transferred to the Otherworld. Go to the hall on the south. Talk with the mer.
This monster has pair of big hands, but someone nice left here some furniture and you can use it as shield. You can fight with the axe or your gun - whatever you like.
Stand behind the wardrobe, wait for his blow, then run to the nearest sack and hit it as much as possible. You need to destroy all sacks.
In his second form Sepulcher will try to catch you so move quickly and don't stop running. Notice that when he's trying to hit you, his hand get's stuck in the floor for a few seconds - use that time to hit it with the axe. When his head falls down to the floor hit it as hard as possible. After 2-3 tries you should be able to perform a finishing move.
Xbox 360: killing Sepulcher will give you Six Feet Under achievement (50 p.)