Oh boy... this topic hit right on. In practically in everything I write the story never fleshes out as I first planned it. A lot of that I think has to do with whatever mood I happen to be in at the time given my habit of using story telling in a therapeutic manner. As for terrible things happening to your characters the best stories are those who take their readers on a roller-coaster with all the up and downs real life entails compared to those which stick to the up and up like an escalators. It is only natural to cringe when something happens in your tale. While it is illogical to be so emotionally invested, it is as another poster said... if you feel nothing towards the characters and the universe you've created then most likely your readers won't as well. In one of the Series I am working on a reviewer called the latest post 'haunting' which was close to the sense foreboding I was trying to trigger in this part of the Centurion series I've been working on. In the series character's die, fall into despair, or plunge into madness but I never try to leave the reader without leaving a little hope that all is not lost. It was a very hard thing to write, not to mention very long but most of it was written during a long difficult part in my life which made it all the more emotional to write. Now that things are much better than before I don't have it within me to write such a dark series, at least not on the same emotional level
In regards to the theological relationship to being both creator and destroyer that the original poster brought up, the only religious philosophy I know of that see god that way is esoteric gnosticism where the creator of the world and all life is also the source of all corruption. Not going to get further into it than that.
Anyhoo I don't really believe one can write without it somehow involving a part of who you are, be it the things you know, have done, not done, or find of personal interest. Even making a conscious attempt to write without bias is bias within itself. That's my 2 cents.