I read this as someone suffering from mental illness, but as is generally the case with paranoia and psychosis... unable to tell that her own mind was doing this to her. It's one of the most insidious things about both conditions-- they obscure themselves from the victim.

Vivid background (I love the broken watch), and such a strong sense of tension and fear-- not only the narrator's, but everyone else trapped in that on-the-brink moment.