How do I make my document look like it was written by a Cthulhu-worshipping madman?

(Improved answer thanks to Bruno's help on his code)

I've implemented some of the things I mentioned in my earlier answer, but I felt this was different enough to get a separate answer.

Once again, tex.sx provided me with a couple of things I needed for this. Bruno Le Floch wrote some code that rotates arguments at a random angle and helped shortening it for this answer. Martin Scharrer showed how to execute a command for every word. Thanks to both of them.

Starting at the top of the code, here's what I did to change the design:

• default font size 17 via extarticle document class
• double line spacing
• define a command \eldersign that inserts an elder sign, sized in relation to the current font size. You need to find an elder sign that you can use, I put in the placeholder eldersignimagefile. I recommend using a PNG image or some other format providing background transparency.
• change the default font to Teen Spirit – you can use any font you like, there certainly are better ones on the Internet. Use them with XeLaTeX and fontspec, as I described in my other answer. (I haven't tested Bruno's and Martin's code with XeLaTeX though.) With a different font, you might want to choose a different font size and different rotation angles.
• remove page number
• free parchment background image that I found at http://www.alfredom.com/art/free-6.htm, here named backgroundimagefile
• centered everything
• changed the text color to MidnightBlue (svgnames color scheme)

Whenever you want to typeset text crazily, you have to pass it as an argument to \cthulhu. For an elder sign, just use \eldersign. You might want to adapt your image to suit the text color.

DISCLAIMER

This is just hacked together and you will very likely run into problems once you start using it more extensively. Take it as inspiration. It was fun for me putting it together. Feel free to make suggestions on how to improve this.

\documentclass[17pt]{extarticle}% This is a document class providing more font size options

\usepackage[svgnames]{xcolor}
\usepackage{graphicx}
\usepackage{emerald}% font package
\usepackage[doublespacing]{setspace}% line spacing
\usepackage[T1]{fontenc}
\usepackage{wallpaper}

% thanks to Bruno Le Floch: https://tex.stackexchange.com/q/9331/4012
% and in his comments to https://tex.stackexchange.com/a/29458/4012
\usepackage{rotating}
\usepackage[first=-6,last=6]{lcg}% you can play around with these values
\makeatletter
\newcommand{\globalrand}{\rand\global\cr@nd\cr@nd}
\makeatother

\newcommand{\randomrotation}[1]{\globalrand\turnbox{\value{rand}}{#1}\phantom{#1}}

% thanks to Martin Scharrer: https://tex.stackexchange.com/q/11598/4012
\makeatletter
\def\cthulhu#1{%
    \@cthulhu#1 \@empty
}
\def\@cthulhu#1 #2{%
   \randomrotation{#1}\space
   \ifx #2\@empty\else
    \expandafter\@cthulhu
   \fi
   #2%
}
\makeatother
% ----------

\newcommand{\eldersign}{\raisebox{-.5\height}{\includegraphics[height=3ex]{eldersignimagefile}}}

\renewcommand*{\rmdefault}{fts}

\begin{document}\pagestyle{empty}\CenterWallPaper{}{backgroundimagefile}

\centering% that madman wouldn't justify his writings
\color{MidnightBlue}% my pick for "looks like ink"

\cthulhu{Hello, I am crazy. I am a Cthulhu worshipping gibbering madman, unhinged by
the horrors I have witnessed. I am a Cthulhu worshipping gibbering madman, unhinged by
the horrors I have witnessed. I am a Cthulhu worshipping gibbering madman, unhinged by 
the horrors I have witnessed. I am a Cthulhu worshipping gibbering madman, unhinged by 
the horrors I have witnessed. I am a Cthulhu worshipping gibbering madman, unhinged by 
the horrors I have witnessed.} \eldersign

\end{document}

On the other points you mentioned: I don't think Dropcaps would look good here; they convey something of a plannedness which wouldn't be in the style of my madman. As for font size changes and random word spacing, I don't know how to do that automarandomly.

Going straight to the source, the H.P. Lovecraft Society offers a number of fonts (some free, some for sale), including Lovecraft Cursive (unfortunately not part of the free set). The whole set of 50 fonts is available for $35.00 and contains more than 80 beautifully rendered digital props.

A quick Google search for "free handwriting fonts" finds this site: Fontspace, and the following font Signerica looks like it might meet your needs. Compile with XeLateX or LuaLateX:

\documentclass[12pt]{article}
\usepackage{fontspec}
\setmainfont{Signerica Medium}
\begin{document}
Some text written by a crazed madman.
\end{document}

Since I have no idea what an elder sign is, I guess I don't get any bonus points.

My humble attempt (thanks to xelatex):

My code to question #29402 on TeX.SX

I'm sorry, friends. TeX.SX seems to forbid answers with more than 30,000 characters. Mine was 50,138 - say again?! - so I had to paste the code on GitHub. Just because it was a TikZ-Cthulhu... :-P

The output:

I used the following font: YouMurderer BB