There is a way to play in widescreen with the correct FOV, and it's built into the game.
Here goes from memory... try selecting a few widescreen resolutions, then applying the change and keep an eye on the aspect of the start screen (with the asylum or cabin on it - I think). Some of the widescreen resolutions are squashed, but I'm certain others are adjusted to hor+.
If you have no luck, let me know and I'll re-install my copy to suss it out properly.