Stesichorus wrote:
Stage 3 requires loss of 1 sanity at the end of each turn, and Stage 4 requires loss of 2 sanity if a R'lyeh token is supposed to be placed but can't be. Based on mechanics and theme, I would agree each stage should be addressed separately, and so sanity could be lost twice.
Yeah, this. According to other threads, each stage is treated as a separate source sanity damage. Thus you can lose 2 stages in a single turn just from Cthulhu's final stage end of turn effects.
Notably, since they are treated as separate sources, toughness level 4 blocks all but the last sanity loss. I've found it pretty helpful against Cthulhu at lower player counts.