I managed to get to the Sanctuary, both in the Wii version and while testing the CS+ beta. I've pretty much admitted to myself that I'll never be able to beat that level with so little health, no matter how many times I try. If you take your time, it's not that bad for a while after you get past the falling blocks room, but good lord, getting past that is a drain. The farthest I got in there was the room before Heavy Press (where there would be the missile expansion chest), but then I got sniped by an arrow and my motivation was shot.
Before Sanctuary, though, it's really not that hard besides the bosses. It's a test of your patience more than anything else. The hardest bosses, I thought, were Monster X, the Core, and the boss rush before the Sanctuary. With all the bosses though, playing them with so little room for error made me realize that I didn't understand their attack patterns as intricately as I thought I did. In that respect, playing hard mode was a lot of fun.
When I first played hard mode on the Wii, I tried holding out for the Spur, and managed to get to the Core with just the Polar Star. But that fight proved to be a brick wall and I reluctantly went back for the Snake. But that made the battle a piece of cake in comparison.