Unlock Impossible difficulty without beating the game first.

Go to: C:\Users\(Whatever your User name is)\AppData\Local\Electronic Arts\Dead Space
Or: Just paste %localappdata%\Electronic Arts\Dead Space into the file explorer address bar.

Open: The Settings file therein.

Change: 'Game.Played = 0' To 'Game.Played = 1'

You may need to save the game once first before the Settings file shows up in the folder.

That's it, enjoy. 2 hours of browsing online for this and no one else that I could find posted this information anywhere. So I did my own looking in the files. Viola, it's that easy.