I was so excited to play, I just went at it right away!
So here's what I've got for my interpretation (spoilers):
First of all, the streets are all named the same as Silent Hill, which itself is references to influential sci-fi and horror writers from the west that played a big part in Silent Hill's story.
As for the story of the game itself: The area you start in actually represents the "other world" of your own guilty creation. You awaken in the bathtub in this personal hell, and have to "descend upwards" back into reality. This climbing of the stairs up into the upside down world (which is actually the real world) is representing your character diving back into his memory and trying to remember what lead them to being trapped here. Upon traveling up to the room where it all happened, the protagonist discovers his briefcase. He was a businessman, set to go on a trip to Chicago. However, he gets to the airport and finds his flight is cancelled. All the better, I guess, he has more time to spend with his significant other. She's pregnant, you know? He can take some time away from his busy work schedule to spend with her, dote on her. When he walks in, though, he finds her in bed with another man. At this point, he loses control. He's blind with rage. He kills them both, ruthlessly, in the very bed he shared with her. He goes to the bathroom, instinctively washing off the blood from the scene. He sees the pregnancy test, reminded both of his future with her, his future child, but also how he's taken it all away. He's killed all of them. He's washed over with guilt and decides to take his own life. He overdoses on the pills, hoping to fall asleep forever. Gets into the bath, marks his arms with two lines with a razor, bleeding out into the warm water. As he drifts away into the release of death, he wakes up in his own guilty prison of his own design. Unable to run from his own knowledge about becoming a murderer, he's doomed to relive his mistake over and over. Repeating to himself, "you know you deserve this."