Maybe he is just insane
All these daemons and stuff. May it was just Ash'es crazy imagination. Think about it. He starts hearing/seeing things and then goes completely insane.
At one part his subconsciousness hinted to him what was going on:
"I'm fine".
"We just cut up our girlfriend with a chainsaw. Does that seem... 'fine'"?
Maybe her girlfriend was fine. She was begging for her life and he noticed, but then the hallucinations came back and he cut her up. Then the hand possession thing made him look crazy as well. Just after the mirror scene he noticed that there was no daemon choking him, that apparently had come mirror. He was just choking himself.
Then some people came over and he started messing with them saying there are "daemons". Most of this was him going completely insane, waiting to kill all the others one by one. The "zombie" in the cellar was another hallucination or maybe one of his victims.
The other people saw the daemons as well? Well no... it was all him. The floating one? Ha... it was just him (not actually floating of course). The others where native enough to actually buy into the idea that he was "possessed". They saw him running around going crazy and they believed he was actually possessed. He saw flying daemons.
At the end where the girls finishes reading from the book the "possessed hand" stabs her. Obviously it was Ash himself that did it.
Then going back in time. He probably got completely detached from reality from there on. Possibly passed out from blood loss.
Also remember the part where everything in the house started laughing at him? At he back at it? Clearly he is *beep* insane.
dunno lol