The room is in a state of disrepair, mostly as the Gatherers had demolished the majority of the room searching for Daniel. It actually consists of three separate areas - a larger chamber with a few cupboards, Daniel's bedroom and a room which can only be accessed by forcing the door open with a crowbar. Beware! Upon going to the right after entering this room, a Servant Grunt will spawn by the entrance to the Guest Room. Conveniently enough, there are a few closets around, so hide in one and the monster will go away. There is no real reason to close the door behind you once you enter that room: The monster will just break it open and do his search anyways.
The key to the Machine Room is located in the closet room, behind the painting to the left. It is stored in a small glass jar, so just throw it against something to break it or slam the glass jar on a table or simply drop it.
The pieces of the third part of Daniel's diary, "Revelations", are located here. One flashback implies that the entire journal was kept here but the Gatherers had taken and destroyed it while ransacking the place, possibly explaining why its pieces are scattered all over the castle.
Another flashback is when you come to the bedroom on the left. If you click the bed, you will hear Alexander wake up Daniel, who shouts out in fear. Alexander then says that Daniel is still having nightmares, then he promises to get rid of them.
There is a glitch where you can get out of the map. Go to the room with the bed and the wardrobe in the corner. You can stack a few objects and try to jump onto/over the wardrobe to get to a little cramped corner. Once you're there, you can jump "through" the wall and you will be out of the map. It should be noted that this must be done carefully or you will miss your target and fall off the map. Once outside, you can navigate your way, read all the notes, grab the key, and trigger the Servant Grunt. If you wish to exit the Guest Room, you can go towards the exit door, lean to the left, and click on the door to exit. This method should be used only if you wish to evade getting hurt by the grunt.
Using the glitch to get out of the map will also allow you to grab the crowbar and keep it for the rest of the game.
Touching the bed triggers the game's only optional flashback in which Alexander arrives to wake Daniel to
answer his questions about the Orb and the Shadow following him, but the young man is experiencing nightmares.
A Gatherer should bash the exit door to the Hall when he leaves, but he simply exits the room without destroying the door. This happens because the door is used to get to the Back Hall and shows loading screen, and the game's engine doesn't allow doors between two Locations to be hanging open.
If Daniel triggers the Grunt, after the Grunt gives up, the music will change back to the previous vaguely uneasy tune it plays normally, rather than the soothing tune with harp that it plays when Daniel first enters the Back Hall, and Daniel will find a torso and blood trail on the floor just outside of the Guest Room.
It should be noted that it's possible for Daniel to fully explore the Guest Room, get the Machine Room key, and leave without triggering the Grunt, simply by not walking toward the very wardrobe he has to hide in.
If you crouch in the corner away from the portait where the key is hidden is,then you can see the grunt walk around over there and walk out of the room without getting spotted or hurt.