Do the servants in Amnesia actually look like that or is it Daniel's sanity?

[Hunter of Shadows]

They do actually look like that

And the sulking servants may have been normal humans then, and were only transformed into hideous monsters later

monsters are just Justine's mental issues

Where did you come up with that? The monsters from my understanding are her suitors, whom she did nasty things to, if they were hallucinations they couldn't kill her, and they definitely can kill her