I have tried outstandingly hard, for hours now, to get the Red or "bad" ending. In this ending (spoilers obviously) you shoot the man in blue, and you find a bullet wound on yourself as well. You allegedly get this by having poor mental health, however after two separate attempts to completely and utterly destroy my mental health, I still get the blue ending. Not just the blue pill (apparently both start the same) but no gunshot wound on You, no trophy, no red mark on the main menu.
I have even started the whole game over and only shot enemies (earning the Antagonist trophy). I have completely ignored the need for sleep and food, only eating and saving to avoid game overs. I killed the majority of monsters in the game. I gave Hank enough pills to tranquilize an elephant, and told him to kill himself. I am still getting the blue ending. My character hates himself when he looks in the mirror (alternately he laughs maniacally or sees the world burning).
How on earth do I get the red ending if this isn't enough? On the psych report I have an "X" for mental health and an "A-" for blue ending path, insultingly enough. I have no idea if I need to get that A- lower or higher for the Red ending. If relevant I'm playing on PS3/vita, the "directors' cut" edition with the extra yellow/white endings.
12 Answers
It seems the easiest way to get this is in fact to torture Hank (the guy in the gun shop) with the flashlight (torch). After about 40 "ticks" of this I managed to get the red ending (though my mental health was already quite low as noted).
The most efficient way to torture Hank is to stand to his left in the gap where there is no X prompt. Then repeatedly press "flashlight" and "talk" (X and [] on playstation), every time you switch on the flash light you'll torture Hank and cause your mental health to suffer. By mashing "talk" this way you'll be able to torture him once every couple seconds. If you're out of batteries, remember you can take a green pill and sleep to get more. I only needed a single battery (and didn't run out) while torturing hank 40 times.
Note that despite the "requirements" lists on the wiki, only low mental health is required; those are just all ways to lower mental health. It seems like it's nearly impossible to get mental health low enough without grinding some bad mental health, so I recommend torturing poor Hank to get the ending.
According to the wiki, you need to do other stuff as well.
Ignoring the need for sleep or food seems to be wrong. You need to eat bad food, eat when you are not hungry, sleep for no reason... But it's all in the requirements.
Your mental health seems to be bad enough, for the red ending.
This ending can only be obtained by completely destroying your mental health.
Requirements:
Kill a lot of monsters
Eat bad food, catfood and Rats
Give Hank drugs and suggest he end it all
Threaten Chuck with scissors
Play Soul Brother more than once a day
Drink too much coffee or sodas (More than once a day, because once is good for mental health)
Attempt to eat Rotting Meat
Eat food even when not hungry or hurt
Kill helpless Fatmen
Get hurt by monsters often
Torture Hank with the flashlight/torch
Eat more than one fruit drop a day
Get the "exhausted" remark.
Sleep for no reason 
