When John arrives at his house, it has been condemned (ironically, by the Paradise Inspection Division as the placard reads), and he finds a zombie locked in his bedroom. John receives a call from Father Winston, who urges him to go to the Cathedral.
When John tries to proceed through the suburbs, he finds out that the Police has closed the gates. John threatens the cops that, unless they open the gates, he will cut off their balls and suffocate them to death. The police explains that they locked the gates since some criminals have been killing and dismembering people. John tells them that he is going to take care of them, so he first goes and kills 7 criminals inside a house. After that, the door of another house is unlocked and he is tasked with killing 8 more criminals.
After defeating the criminals, a cut scene shows a stereo and the voice of the Postal Dude, who seems to be a radio announcer in Hasselridge, announces a news brief, and another man reports a zombie outbreak. Immediately, the whole suburb (and eventually the whole town) is invaded by zombies, and the gates are open, and access to a tunnel is now possible.
The tunnel leads to a commercial area, that features many locations from Paradise, including a building from the Office Complex, the outside of the Clinic, the Book Repository, and a 7th Heaven Food Store in the residential area. After entering the Clinic-like building, John eventually finds a back door that leds him to the exit and the Cathedral.