What really happened after eels or eel like species are injected into Lockhart's body?
He seems really calm after that scene. Are all the patients injected with eels?
Verbinski has spoken about the film’s dream logic, that certain things are unknowable.
So I'd say it's not possible to know if anything that happens after Lockhart is admitted to the sanatorium is actually happening or a hallucination or a dream.
But if you follow what's happening on screen you'll see that Lockhart finds several sessions for the "transfusion" treatment in Penbroke's medical file. That (and the amount of other tanks in that room) suggests that other patients were being fed the eels. If it's not all a dream.