Here's the script you should use:
GiveSanityDamage(5.0f, true);
Change the number to whatever you see fit for the situation.
As for focusing on the dead body you can use this:
StartPlayerLookAt("nameofdeadbody", 4.0f, 4.0f, "");
Change name of "nameofdeadbody" to whatever you named your dead body in the level editor. Also remember to call a
StopPlayerLookAt(); when you want him to stop looking, otherwise your player will look at the body forever.
As with sanity damage, mess around with the values to achieve the disired effect. Read up more at script functions:
http://wiki.frictionalgames.com/hpl2/amn...s#insanity