The Shadow Over Innsmouth by H.P. Lovecraft

In the final episode of the story, Olmstead makes a shocking and terrible discovery.

Chapter Four: Dismissing Zadok's tale as lunatic fantasy, the narrator returns to town to catch the Arkham bus, only to find it experiencing engine trouble - despite making good time on its last run. Olmstead is thus forced to spend the night in the town's musty hotel, The Gilman House. Later, as he lies in bed trying to sleep, he starts to hear strange noises, whispered voices, and then the quiet fumbling of someone trying to enter his room ...

Chapter Three: The narrator manages to lure Innsmouth's nonagenarian drunkard, Zadok Allen, into conversation. At first the old man is reluctant to speak of the town's shadowed past, but as whiskey gradually loosens his tongue, he tells the terrifying tale of what lies under the sea beyond Devil Reef.

Chapter Two. Olmstead travels to Innsmouth and and finds it a crumbling, mostly deserted town full of dilapidated buildings, populated by shambling people with strange narrow heads, and watery, staring eyes.

Chapter One. The narrator, Robert Olmstead, recounts how, when on a tour of New England, he became interested in the sinister, rumor-shadowed town of Innsmouth, Massachusetts.