I'm a little bit of an arm chair psychologist. I'm sure you could get some professional advice from a PHD at a university if you haven't already.
I wouldn't recommend alcohol as a means to combat hallucinations.
Sleep paralysis can have some really mundane causes or contributions.
Mentally, from people I know who have dealt with what you are talking about, have a couple of issues going on.
I don't know if you believe in evil spirits or not. The stuff I'm going to tell you about, it doesn't matter. If evil spirits are created from somewhere outside of your mind and then come to affect it, or something is created inside your mind that you perceive as an evil spirit, the same cure applies.
The first is that there is some unresolved emotional trauma. Almost everyone who has this thing going on was abused by family or peers. There could be some sort of self image issue because of it and sometimes there is a feeling that you deserve to be a good candidate for this sort of sleeping disorder.
The next issue is a sort of feeling of helplessness in the face of the problem and a lack of faith that it can be resolved.
The third is a sort of odd interest in what's happening - like it makes you special. If you could see it from the outside, it is interesting, and sometimes people know it.
So there is several steps I believe work together to overcome this sort of thing, in addition to researching the mundane causes of sleep paralysis and working to limit them.
If you are not accustomed to doing cardio, start doing it. Running or walking outside is best, by yourself. I like to do it in the evening when it is cool, but when the weather sucks there is nothing better than going to the gym. It is not easy to do cardio. If it was, the world wouldn't be full of fat people. People who do cardio are mentally stronger than people who don't because they practice full engaging in an activity when their bodies are telling them to quit. They are also committed to an activity that they do not ordinarily feel like doing. Make yourself do cardio.
In addition to the mental training, exercise releases chemicals in the brain that will make you happier.
Next is a life style choice. You need to start making decisions fast. I mean a lot faster. When you see a mess on your kitchen floor, clean it up right then. When you turn on your shower in the morning, just get in while it is still cold. I don't mean step in slow. I mean get under the water and freeze yourself. Do not pause. This sort of thinking is good for life, for self defense, and for invoking your willpower in situations that feel like they are beyond your control.
If you have a lot of free time / down time where you like to talk or think about your feelings, fill it up with meaningful activities. Start studying if you have nothing else to do. Volunteering is better. Volunteering contributes to a better self image.
Stop eating shitty food. Clean up your diet. If you are going to eat processed food, don't eat it at night. Add in some good and healthy fats like avocado, fish, nuts and olive oil because just maybe your brain is missing something. Get a high quality multivitamin. This is good for you in general and should be a part of your life style is you have a mental problem or not.
Do not drink pop, ever. Not diet. Not regular.
Next comes the mental training beyond cardio.
You need to, if you haven't, develop a better self image. I'm not trying to judge, but posting about how you were kept out of the military years ago speaks badly of your self image. What are some good things about yourself? Are you doing anything that you think is needed and worthwhile? If not, change that. Do some volunteering and donating. Don't argue with people, strangers or family. Don't listen to self depreciating music. Know that you can be the change you want to see in the world and that when you act right, you are good because of it, if other people see it or not.
You need to learn about compassionate meditation:
http://www.self-compassion.org/guided-self-compassion-meditations-mp3.html
http://tibet.emory.edu/research/
Compassion, thoughtful loving sadness, comes from the part of your mind as other positive emotions. By meditating on compassion, you increase the amount of good feelings you have. This will directly benefit you in your life and help diminish the negative images you see.
If you believe in evil spirits, this compassionate mediation part is for them. If you don't believe in evil spirits, this next part is for yourself. Recognize that whatever emotion you connect with an evil spirit is something that it is feeling itself. If the spirit was constructed by your mind, then that spirit is a part of you that you made and is suffering needlessly. If it makes you afraid, it is afraid. If it makes you angry, it is angry. When you see it, tell it you understand, and that while you could share in its pain now, tell it you can another day, but offer it your sympathy.
Recognize that you, yourself, are a living being the same as any other and that you deserve compassion, especially from yourself.
Finally, evil spirits, sleep paralysis, ghost stories, and so on and on - recognize that it isn't interesting. People all over the world deal with this shit all the time and it isn't special. If people didn't suffer from this sort of mental problem, there wouldn't be as much religion in the world. Do not entertain thoughts about this sort of thing as if it gives you special significance. If it is a problem created out of trauma in your life, bad genes, bad sleeping conditions, bad food or anything else, it doesn't need a lot of extra thought dedicated to it.
Ever see those old images of the men turning their back on the demon and it gets smaller? There is a good reason for that. Treat this problem like it is boring.
Finally, you can combat this sort of thing with prayer or meditation. Do you believe in Christianity, Islam, or Buddhism? A "mantra" (sanskrit for mind protection) is a word or phrase that when repeated, protects the mind.
By the blood of Christ I am Free
Ohm Tari Tutari Turi Soha
I suggest you find one you can believe in and repeat it when you feel afraid or when you can't wake up.
Anyway, my 2 cents. Hope some of it helps.
