The Gray Whale Inn in Fort Bragg is described as a haunted hotel with reported paranormal activity, stemming from its former use as the town's first hospital and morgue. While specific details about its haunting are limited in the provided snippets, a related video mentions unexplained occurrences like curtains opening on their own and the appearance of an angry ghostly figure. The inn's past as a hospital and morgue is a key factor in its reputation for being haunted. An incident involved curtains that would open multiple times, even after being blocked by a chair. Witnesses described seeing a woman with "angry eyes and a snarl" who then vanished. These experiences have been described as shocking and disarming, changing perspectives and reinforcing the belief in unexplained events.