But while this is all good proof, it can easily be dismissed.  Jennifer only states the liquid in the bathtub looks like blood in the dark.  The lighting and creepy experiences she had recently been subjected to could be to blame for this comment.  While there are three holes in the garden, it IS a garden, where things are typically planted.  And all three of the holes are still dug up, with nothing inside.  As for the rhyme, my explanation is that Gregory combined his pea-farming with the newspaper article her read and the rumors about the stray dog he heard in town and combined them into a morbid story-we learn during the "Once Upon a Time" chapter that he had a lot of trouble writing happy stories.  And Wendy's name for his house might just be her making a connection between life and fairytale after meeting Jennifer.  "Hansel and Gretel" tells the tale of two children and a witch who lures kids to her with sweets.  She keeps one kid locked up to eventually eat, and the other child must try to find a way to prevent this and rescue the imprisoned kid.  Gregory often gave the orphanage kids sweets, thus why Wendy might connect him to the witch in the story.  He also keeps Jennifer locked up in his house, much like the witch does to Hansel, leaving Gretel-Wendy-to try and perform a rescue.  We already know Wendy kind of overdramatized her life in a fairytale fashion-making herself out to be a princess and Jennifer a prince in need of rescue.

Another thing that makes Gregory being a murderer seem unlikely is motive and personality.  Why would he take and kill those kids?  All evidence points to Joshua still being alive when they occured.  Some argue Joshua could've been dead then, and Gregory was taking kids to find a replacement.  Even if Joshua had been dead, could his father really kidnap and murder innocent children?  The orphanage killings were only possible after he had gone insane and been tortured, manipulated, and abused for months by Wendy in disguise as his dead son.  We learn from Jennifer that even though he thought she was his dead son and would not let her leave, he was still very kind to her, and she was hesitant to leave him.  If he was some kind of crazed killer, one would think she would be a lot more eager to get out of there or would have at least mentioned it to Wendy. 

If he is, indeed, innocent, then was the newspaper article meant as nothing more than inspiration for one of his stories?  If so, then it is quite misleading.
Recently, scenes have surfaced that were allegedly cut from the US release of the game.  One of these shows Gregory burying bloody clothes in his garden and acting strangely violent.  Atlus has now confirmed that these scenes were just leftover data that were  scrapped, but not removed from the Japanese disk.  Thus, they are not canon to the actual story.  It is also possible that the article about the kids was part of the abandoned idea, but remained in the US version.  This is supported by the more violent and villianous personality of Gregory in the early-released trailer and the removed scene. 
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