Ive just been listening to a BBC concert version of this story and tuned in to your vid to get a grip on whats going on. Im still puzzled about this hound business. Was it just a big dog in make up then, not a devilish pooch? Its all a bit vague.
This is essentially a Scooby Do plot in that the supernatural is falsified and used by the villan. The main difference that the horror is real and people ends up dead. Deliberately.