I love it that he gets scared. Carnacki is such a fallible and wonderful hero!
I have to agree about context being important while listening. I was on vacation in Hawaii (yes, yes, poor me) and jogging through sunny cane fields whilst listening to this and I gotta say, I had to work harder than normal to get into "Carnacki mode". After the first story, I was all girlishly eager to get my Carnacki on and it was totally worth it. Despite my overall sunny and non-creepy listening environs, I was helped slightly by the large number of squished and mutilated toads along the road. They were much more awesomely creepy while listening to Carnacki.
As for the queer thing, I'm with Listener on this one. I "grew up" reading literature more than listening to contemporary kid speak, so when I'm reading or listening, I don't hear the word as anything other than itself. Confession: at the end of the story, I was like "where was the qword queer? I didn't hear it! Dave is sooooo making stuff up in the intro." But alas, apparently I was so in the groove that I just didn't hear it as odd. The one thing that always struck me as odd is that he was always going off to gather his (oh, man what did he call them? Provisions? Supplies?) stuff and place it in the center of the room. That was some big stuff. How did he get it up there? No mention of delivery personnel or manservants to help? Hmmmm.
And is there a band named Electric Pentacle yet? Because that is one awesome phrase. I just like to say it out loud for fun!