Prof. Charles Catania says that physical problems with eyes can cause effects like seeing blood run up walls, dust storms, clouds and haloes that are not real.

A slight bleed near the retina can cause the appearance of blood running upwards (up a wall, up a road), etc, depending on what the person is looking at. (It runs upwards because our eyes invert what we see, abd as the blood runs down in the eye, it looks like it is running upwards). A smaller bleed can look like blood appearing in the air, and moving upwards in a line. (Covering one eye, then the other, will reveal which eye the bleed is in.)

Also, dried particles of blood (perhaps resulting from a small bleed into the eye) or other debris or particles can create an appearance of a mystical cloud, a dust cloud, or a wide variety of strange (unreal) phenomenon. This might occur only sometimes - when running, bouncing, driving, etc, depending on what stirs the particles.

Many other effects can result from damage to the eye, even when the damage doesn't hurt, wasn't noticed, and symptoms only occur sometimes. It can be very difficult to put down some of these random hallucinations and effects to physiological causes unless you are familiar with ophthalology, so many people would naturally assume they're real.

This was reported in The Skeptical Inquirer, 2007 Jan/Feb (Vol 31, Issue 1), p49. Charles Catania is a professor in the Department of Psychology at the University of Maryland, Baltimore Country.

A brief sentence based on this report appears on "Phsyiological causes of strange experiences" by Vexen Crabtree (2002).