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To me it kinda looks like this section of the world map that keeps getting posted could just be two different stages of the same town.
Compare the top to the bottom, and it kinda looks like top version is the scenery of this town, with the bottom one having the buildings/waterfall/etc painted on top of it. The trees all mostly seem to match up, and the mountain on top is pretty much identical.
So could be the top one is a proto-version of the town leftover in the ROM, or.. I'm thinking maybe top was meant to replace bottom at some point in the story (but they hadn't finished putting in the buildings etc into the replacement map yet). Maybe at some point the mountain blocking this town from Silent Hill gets removed somehow allowing you easy access back into the town, replaced with that picket-fence section.
I dunno, just some thoughts.
