I know it never explicitly states it in the game, but I always got the vague impression that the sandstorm was not a natural phenomenon (several of the intel tapes seem to hint at this), and seeing as the CIA were so eager to totally bury the remains of the city, by preventing the 33rd survivors and other refugees from ever leaving (by cutting off their water), I was thinking it was most likely a test or use of some secret weapon which they were trying to cover up. In one of the intel tapes, it says that the wealthy knew of the storm in advance (admittedly possible with weather equipment, but then why was no one else aware of it?) and escaped the city, while everyone else was told to stay and wait for evacuation.
Of course, the next question is why the CIA would use such a weapon, but it could have been a test, mis-firing or use to keep other states in the area in line. Or, perhaps it was to bury some secret there forever (further explaining why they wanted to ensure no one ever left to tell the tale).
On another note, I also wondered if there might have been some kind of psychotropic drug added to the storms, which further led to everyone generally going mad and killing each other. Admittedly it could mostly be explained by people desperate for survival/water, but the large amounts of psychedelic graffiti and the apparent complicity of everyone to shoot at each other (Walker and co. , the 33rd and refugees), as well as Walker's own hallucinations made me think there might have been some extra element in it. Of course, the game may simply be trying to show how desperate people are willing to do anything to survive, or to do what they believe is the 'right' thing, and how this can be so easily subverted.
Then I had a theory that subconsciously Walker and his men knew exactly what they were doing all the way through, having been given post-hypnotic suggestions by the CIA before starting. The fact that their original mission was simply to provide recon adds some plausible deniability, as they could just have been Delta force operatives who went rogue. Gould and Briggs seemed to know exactly who you were and seemed to have almost expected your presence there. Again, this would explain the hallucinations, and adds another dimension to the game, in that the player is effectively the will of the CIA and controlling Walker's actions without him realising, while he just has to look on in horror.
Anyway, bit of a wall of text, but finished the game last night and thought it was an amazingly atmospheric game. No other game has so totally sapped my enthusiasm to play on after one cutscene...
Also, in a further Apocalypse Now reference, if Walker had been hypnotised, then his 'true' mission was always to assassinate the Colonel (and hence why his men were so eager to lay down their own lives to ensure he completed it). Upon finding the Colonel already dead, Walker's already tortured mind finally snaps however ( perhaps symbolised by the shattered mirror), and his hallucination of the Colonel, who until this point has represented the remains of his conscience, either finally kills him, or is itself killed.
I didn't get the impression that the sandstorm was unnatural from the intel. Do you remember which ones specifically? I'll have to look it over again.
The way I understand it, the wealthy authority figures (who could control the flow of information) refused to inform the public so that they wouldn't have a problem evacuating when the time came.
It was mentioned either in an intel or in a dialogue that the reason the CIA wanted the city mopped up was to clear the 33rd's failure in evacuating the remaining people. This was to make it appear that the US was not involved, although I don't really understand how that would have helped the US' cause, considering news of Conrad's aid to the city was already in papers.
As far as drugs, I doubt they were used as a weapon. It's understandable that the city would be in chaos after the storm. Every man would be for himself in that situation. And the hallucinations? Well, they were in desert heat without much rest and water.