I like all of the endings a lot.
If I had to choose one as my favorite; it'd be the Good ending.
I like the thought of Harry overcoming this horrific scenario, but not without loss.
That's what Silent Hill is to me: a fine blend of conflicting emotions. It rings within your soul... a steady tone of hurt & understanding.

So, in the Good ending we have Harry going through all of this to lose his daughter, although he still leaves with a child.
Also, Cybil is killed. Don't get me wrong, I really adore Cybil.
She's Harry's only real ally; a comforting stranger. So when she dies it hurts bad. It might be shallow-ish, but I feel like that really rounds out the experience.
I do, however, like reading about these old theories where Harry is trapped in a loop (I wasn't a fan until 2009). I find it so fascinating. I view it like so: if Harry saw Dr. K use Aglaophatis on the Lady in White, then maybe in Next Fear, the next loop, Harry gets the subconscious notion to use the red liquid on a possessed Cybil.

I always liked the Good Ending. Not only is it cannon, but it wraps things up nicely while still leaving an air of mystery. My second pic would have to be the Bad Ending.