OKAY - Are you READY. This is emphatically solved now. I mapped out a huge swathe of save game hex files and some friends helped me extract the .AP files into something barely readable with a hex editor and spent some time going through those and came up with the entire path.
The most surprisingly revelation? The Security Room? Entirely a red herring. Including an almost exact copy of the security room which contains the line "The inscription on the walls reads 'The Avalanche has already bugun."
https://youtu.be/DWC-HCNOFlk - Here's a video showing the whole path.
But here's a text version too.
Step One - The Grappling Hook
Straight after Escaping from meeting Jessica's Pimp in Act 2, Go to Tim's Apartment - Since his keys were stolen during the chapter change cutscene, You'll need to pick these up from the paper inside the wad of Gum. At Tim's Apartment, click on the penny farthing picture on Tim's bookshelf exactly 6 times. If you click on it 7 times, you'll need to reload back as the Hooded Stranger will only appear if this is done Six times. Go to Heisenberg Park and the Hooded Stranger will greet Tim as if he knows him, give him the grappling hook and then keep looking at his watch.
Step Two - The Broken Watch
At this point until before the Date with Jessica you can return to the Last Chance Bar and play the pinball machine a couple of times until the message "I love the multiball - I even managed to stop the clock." message comes up. This message is random so it can take some time to show up.
Then go to Jessica's and next to the trash bin is the broken watch.
Play the game until the Date but don't get any subway tokens so you'll be late and Jessica will unfortunately be caught up in the assassination attempt and be underneath a sheet at the resturant - Going down from here revealed a part of the subway that's never accessible at any other time.
The Hooded stranger is here. He doesn't know who Tim is. You give him the watch and he thanks you. Failure to do this removes the Grappling Hook from your inventory as it seems the Hooded Stranger has a Tim Machin - Sorry, a Time Machine in the watch and travels back to give you the grappling hook.
Step Three - The Rope
Once you've played as far as Noxytech, Head back to outside the Chronicle - This is very cheeky as Tim no longer works here and has no reason to come back. Clicking on a shadow near Hallmag's car, Tim mentions the shadows appear to move. Now the next time you go inside Noxytech, The Rope has appeared.
Step Four - Finding the Secret Room
So going to the Morgue and using either the Grappling Hook or the Rope on the second level will activate Tim scaling into the building as long as you have both in your inventory.
I found a "Congratulations" message in the room script here, but it wasn't actually attached to any called code so *shrug*
Head upstairs to the 7th floor morgue and find that the door to the Mortitian's murder scene has been locked. The game mentions tricking security which had me baffled for a couple of days.
Step 5 The Door Puzzle
So this is literally trying every door in the morgue in a certain order. It's a lot of walking around and getting a lot of "This door is locked" messages. There is no indication that the puzzle is being solved at all - I know this only from watching the save games in a hex editor.
The Order is
1st Floor Morgue: Middle Doors, Right Doors, Left Door
2nd Floor: Middle Doors, Right Doors
7th Floor: Middle Doors
Lobby: Elevator.
Now the Right Doors on the 7th floor are unlocked.
Go inside, Use the control Panel to open the Drawers and then finally... Karthik pops out!
Who'd of thunk he'd be hiding in a morgue? Also Aaron Marsh is a mad Genius to have made this sadistic path.
So um, Yeah... It's been 24 years since the game came out, And 5 years since I found out about the game, and one year of really trying to crack it. And I couldn't be happier.
I've emailed Karthik too though I doubt he still has the Design Bible Prize. But who knows?