I'm a fan of HP Lovecraft and I still remember having had a lot of fun with Chaosium's pen-and-paper RPG, my opinion might be a bit biased because of this ^^!

The general feel was good, just a quick look at your work made my mind go back to the time I spent at a table with my friends trying to get out of a muddy swamp with a bunch of half-blooded cultists on our tail. Being a fan of the "light on rules, heavy on narration" style of gaming I can't but appreciate a solution where "rules" are limited to a tiny leaflet (and the game master's debauchery of course!)

In the hands of a seasoned master this kind of stuff might be a great way to attract newbies into roleplaying!

A small final note: I personally think sanity deserves a bit more space.  Taking inspiration more from your rules than Chaosium's, I'd add some twist like, temporary reduction of a character's skills due to the trauma, or the inability to adequately process the results of an action (say for example that I want to inspect a room. If my sanity has just dropped because of a traumatic experience I might be unable to tell what's real and what's just the fruit of my hallucination).