Old thread, I know, but I might have something to add.
Reading through this thread, I've had multiple thoughts regarding the bad ending and the Butcher.
The Butcher - someone said that the Butcher could have been something Travis feared becoming. I like that idea. After all, Helen was always going on about how Travis was a "devil child". That sort of babble would have had an effect on a small child, and given that he spent time in/was in Silent Hill and the Otherworld, Helen's delusions regarding her son, and her son's fears in becoming a monster, could have manifested as the Butcher. Of course, I don't think that's all there is to the Butcher. He could also encompass Travis' anger and emotions surrounding his parents and childhood (no-one would survive that childhood without being messed up). I honestly doubt that the Butcher was a serial killer aspect of Travis as some people have suggested, but that's just personal opinion based on the fact I think it would cheapen the game.
Travis being strapped down in the bad ending - I think this scene probably has more to do with the Order and Kaufmann than it does the Butcher and any serial killer leanings Travis may have. To me, this ending suggests that he wasn't lucky enough to escape after Alessa split her soul, and now the Order have him locked away (for now) in Alchemilla Hospital where he can't interfere further, or reveal their plans (not that anyone would believe him). I doubt they'd keep him alive and around for long though, even if they do have a sanitarium where they could dump him after drugging him.
Woman: "What are you talking about? I'm not your mamma. Please--No!" - There have been a few suggestions for this; he murdered a woman who reminded him of his mother, or he murdered a woman in the sanitarium who just so happened to be in same room where his mother was located when he saw her there as a child. As much as I dislike the monsters-are-actually-people theory, I think the latter makes more sense. From what we see, Travis seems to relive memories from his childhood at certain parts of the game; namely just before the boss fights between his mother and father. He could be caught up in his memories so much so that he follows along, but this time instead of being a defenceless child, he fights back, and kills an innocent woman who was at the wrong place at the wrong time. But then, that would contradict Lisa's lines in the sanitarium where she seems to be talking about Helen. If Helen's not in that room, and another woman is, then what the hell was Lisa on about?
Man: "Scuse me sir. Motel's closed for the season. Wait--! (screams)" - Again, it has been suggested that this was either the result of Travis being a serial killer, or him mistaking a motel worker for his father. Again, just like above, I like the latter suggestion. Again, Travis could be caught up in his memories, and wanders into the motel room they stayed in years before. His memories, the otherworld, and an innocent person being in the wrong place at the wrong time could explain this. I know that there are only a handful of people who see Travis while he's in the otherworld, but powerful memories and emotions could have pulled both the man and woman into the otherworld where Travis then saw them as monsters.
Travis' father: "What are you doing, son? Careful, daddy's--!" - This is a bit different to the other two. It's already been suggested that Travis probably killed his father, and even went so far as to hang his father for whatever reasons. Honestly, that idea doesn't really make much sense to me.
Honestly though, I can't really come up with anything for this. It could be a false memory as a result of guilt over Richard's suicide and Travis' inaction, but that doesn't seem right. This line is so much different to the other two. Why would this be a false memory if the other two are real?