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I've just come up with an idea. As I am sure most people here are aware, survival horror draws the fear one experiences playing a survival horror game partly from the fear of being alone. While I am aware that this isn't the only part of a scary experience, I believe I can make something scary by doing the exact opposite of this: putting you in a group of eight or more.
You see, my idea is that supplies (ammunition, weapons, first-aid, etc.) would be just as scarce as in a single-player game, forcing you to work with your team to ensure equal supplies are being handed out. Have a player who hogs the shotgun shells? Then you are going down in a pool of blood, my friend, and you'll be taking the hog with you nine times out of ten. This requires you to get to know your team so they'll have a reason to want to give you a helping hand, other than looming death. If you really want the true survival horror experience, then you'll play with people you don't know, requiring you to think fast and on your feet if you want to survive. If someone is running from the group, you'll have to go get them, if only because they're carrying a few valuable bullets, and what happens if he alerts a nearby monster? Then it will take him down and start searching for you and your buddies. Just hope it doesn't find you, because you'll only ever have a single rifle magazine at the most to everybody in the group, and what if that's not enough to take down the monster? You see, everybody will have to work together if they want to survive. Say there's a few monsters around the corner. Since your bullets are spread thin between you, you'll be wanting to sneak past them, as taking them on with a kitchen knife is flat-out suicide. But as you are passing them, someone kicks a can by accident and the whole group dies.
This way, you will not want to face a monster. Even if you're working with a team of people you know well, there's still room for error, as you are, after all, just regular people with a few pistols and a knife between you. You want to survive, then you will have to work together. If you can't, you'll die and you'll take several other people with you.
Now I know what you're thinking: "Isn't this just the basic premise of Left 4 Dead?" Well yes, I can see the similarites, but Left 4 Dead doesn't require you to work as a team anywhere near as much as I intend for this. How many times have you literally had one bullet in the chamber of a pistol and the rest of the group reduced to melee weapons? That's right, that rarely happens. Besides, I won't be handing out unlimited piles of ammo any time soon, or safe rooms, or even more than one health-pack to a level. You'll have to ration equally and fairly.
Anyway, I've posted this here because I think that it would work, so people can comment on that, and if somebody likes my idea than they're more than able to create a mod for Source or whatever, so long as I get a bit of credit. I don't know anything about mods, coding or such, so, you know. I am, however, more than willing to help with development on the story side of things, if it does get off the ground.