I haven't played Outlast, but if you want psychological horror with combat, then you should check out the Silent Hill series and System Shock 2. I've also heard cool stuff about Dead Space 2, it's not the most hardcore horror game, but as far as action horror goes, it's supposed to be good. I've seen a video of an eye surgery scene in the game and even if you get it right, it looks very screwed up.
Dead Space 2 is 90% action and 10% horror but it's good. There's one level late in the game that's scarier than anything in the first game.
call of chthulu dark corners, for a good while you are defenseles, but even when you get weapons you are not that effective. very atmospheric game btw. --- PSA: Their/there/they're are not the same, nor then/than and should of does not exist it's should have