Step1
What I see in my mind. Do it as you wish though.
When setting up this room you want to make sure the bed is to the side of the room and the rocking chair across from it in a corner. It helps to put both in a corner of the room. That way you leave enough room for the guests to get right in the middle of the scene. As shown in the picture. Put the desk lamp beside of the rocking chair. Not beside of the bed near the exit. Doing this, you make sure the guests won't knock it over. (the red line will be explained in the last step)
Step2
Cover most of the bed in fake blood. Or spray paint. Some fake blood turns brown after it dries. I use spray paint here. But for those highly into fake blood, go for it. Put the blood in puddles and even use your hands to make it even more messy. Make hand prints and drag your hands over the bed to give it more of an effect (WEAR GLOVES). If you have decided you want someone in the bed as a victim, make sure the paint is dry before they get in the bed... If its fake blood, it won't bother them, because they will need fake blood on them anyway. (face, arms, body). But make sure the victim is wearing clothing that you can put fake blood on.
Step3
You also need to put fake blood or spray paint on the blanket the old lady will be knitting. Not a lot though. Don't try to cover the entire thing. Just in SMALL patches.
Step4
Add the spider webs around the room to make it look old. Just not over the lamp... If you do, you start a fire for those wondering "Why not the lamp?". Try not to glob the spider webs. Thin them out and spread them everywhere. Corners of the room, top of the room, etc.
Step5
Now for the make up. You need prosthetics for their faces. You can get the prosthetics at Spencers or online. Either one... Find where you want the wounds to be (above their eyes, across their face, etc.) Then add the make up and fake blood. (Not going into a lot of detail here.) Get the actors into their costumes. Put fake blood on them. Same for the victim. Be creative on how you apply it.
Step6
The old lady goes in the rocking chair with the tattered doll, and blanket she will be pretending to nit. She starts talking to the guests as they enter, but she keeps her head down while she knits. When the guests get closer to her, she raises her head and reveals the massive wounds on her face. She needs to say something like "You never call anymore. It's like you have completely forgotten we exist." She doesn't stand, nor scream nor anything like that. She just sits there and knitts all calm.
Step7
(IF YOU HAVE A VICTIM) As soon as the guests enter, this person needs to start whispering in an exhausted voice. You don't need them going insane and screaming. I've never seen a half dead person going into fits of rage and fear. You need them to try to drag themselves, while whispering and moaning, towards the group.
Step8
Old man stands just outside the room near the exit of the that room. He will have the meat cleaver. When the guests gets near him, he will enter and start swinging the meat cleaver. You need to give the old lady something to say that will cue him to enter. This way, he doesn't enter at the wrong moment. When he swings the meat cleaver, he needs to act like he is extremely weak. He will also need to miss them every time. Maybe even have him slightly "fall" onto the bed. He also needs something to say when he enters. Maybe "We want you to come home and stay with us". You will need a guide for this, to keep the group from walking or running dead into the old man and getting hit by the meat cleaver. When the old man "falls" slightly on the bed, the guide needs to lead them outta the room. Getting out the room quick won't be a problem. That, I promise. The groups will be screaming to get out.
The red line, in the picture I placed for step one, is just about where the old man needs to make his way into the room. This way the guests don't run dead into him and he can NOT hit them with the meat cleaver.