Hell mode:
- grab the grenade in the bathroom and use that to take out the first monster (finishing touches with the knife)
- use the screwdriver to open the door and head out
- oops, guy hiding around the corner hits me once. i back up, then run past into the room with the shotgun
- consider trying to run past again, but as he lumbers into the room I decide that killing with my pistol might be smarter
- in the next room, rush through without killing anything (the first explodie guy hiding around the corner was a slight surprise: open the door quick!)
- instead of fighting my way through this room, I just turn left and walk safely to the door without firing a shot (kind of knew there would be an explodie guy here from your comments)
- herb up ahead... nice! who wants to bet that some enemies will appear when i try to grab it?
And that's where my play through on Hell mode ended just now, as I stopped to take a few notes about what had happened so far. Not a big fan of how this game demo resets if you stop playing for a couple of minutes.
It sounds like your problem stems from playing like it's an action game instead of trying to avoid combat and preserve ammo for emergency situations. Remember: survival doesn't mean you have to lay waste to everything in your path. In some cases it's better to just ignore and avoid enemies.