Bet this has been proposed many times, but I hope my idea differs in that I try to keep it small, just some tweaks which can be accessed through the menu. (Perhaps after one full play-through.)
Thing is, there are elements in the game that made it very easy. Like the music you heard when monsters were near, and the fact that there is always a hiding place ready, and last but not least, the fact the enemies are kinda predictable as to when they come.
The idea is that when you select Hard Mode, a script float gets set to 1 or TRUE. (i.e. HasHardModeSelected = 1.) And when a map loads, it'll check for this and when it detects this to be 1 or TRUE, things will be different. Other monster entity files will be used (Without enemy music, but still with their spawn roar/whimper intact.) and perhaps even placed at different locations. Also, more monster encounters, aaand... Less oil and tinderboxes. Last but not least, some objects will be removed/placed elsewhere to make hiding harder, perhaps even so that if you do not build a hiding spot, you will get hunt down.
I think this is the best way to make a Hard Mode possible, only dunno if it is easy to implent it into the menu and such and if the script command is already possible or would require some changes, but I would like this.
What you guys think? :o