2020 UPDATE: This is an article from a very long time ago. For ten years, it floated about on the internet, containing a very serious error. Originally, I mistakenly attributed the popularisation of the Walsingham Ghost tale to the famous London journalist W.T. Stead, in his 1891 book Real Ghost Stories. I then proceeded to tell various stories about Stead, including his connection to the infamous British Museum 'cursed mummy-case' and his death on the Titanic.
Whether through sloppy research or a genuine mix-up, my younger self was seriously in error. Stead never wrote about this story at all. The first book to reprint this newspaper story was in fact True Ghost Stories, written in 1915 by Hereward Carrington. Getting the names of these two books mixed-up is understandable, and Stead is not an unlikely source for stories like this. He was a prominent spiritualist, and he did after all write collections of 'true' ghost stories. However, not going back to primary sources to check was poor journalism on my part.
Carrington was an interesting character himself - a British-born investigator of the strange who moved to America at the turn of the 20th century. He was an SPR member, maintained an odd balance between skepticism and belief in mediums, and was probably best-known for investigating and writing about the 'Amherst Mystery' poltergeist case - that of the infamous 'Esther Cox, You Are Mine To Kill' quote.
Soon, invisible forces begin to cause havok within the house. The artist chose to portray all of these as being the work of an evil-looking blue spectre. Here he breaks the neck of the family dog.
The family has a teenage daughter. One night she’s doing her makeup when she feels an icy-cold hand on her shoulder, but can see no reflection of it in the mirror- it’s that horrible blue man again.
An invisible bare-footed man follows Dad around in the garden one day.
Now things get serious- another family has come over for a dinner party, but the ghosts ruin things once again. A horrible moan is heard from upstairs, then blood starts to drip from the ceiling onto the dinner table, forming a huge pool. The Walsinghams run upstairs, but there is nothing to be found. They rip up the carpet, but there is no explanation for the blood that continues to drip onto the table. Next day, a reputable chemist examines a sample of the blood and declares that it’s human blood. This entire scene should be stolen to add to the best horror movie script ever.
The Walsinghams justifiably abandon the house, and according to locals, it sits empty for some time, as more moaning and screaming echoes from within. Then a guy called Horace Gunn agrees to spend a night in the house for a bet. He experiences a number of horrifying things, climaxing with this horrible image (the eyes, the eyes!)-
Brr. I’m glad that’s over. Horace runs from the room, but that old blue man is still hanging around, and ‘icy’ hands grip his ankles, knocking him to the ground and then trying to choke him. By the time he escapes, he’s reportedly wound up in an asylum. Poor, brave Horace Gunn. Hope he won some money for that.

Carrington's book cites, as his source, an article in the San Francisco Examiner. Here's the beginning of it, dated to 29th Nov 1891, and locating the haunted house in the town of Oakville, near Savannah Georgia.
Another newspaper version of the story I turned up comes from the Brooklyn Daily Eagle, dated Dec 5th 1891.
These seem to be the earliest available versions of the story.

