I don't know exactly why you may have developed that, but my guess is that the root cause is a very great fear of death, and you laughing hysterically is a way for you to cope with that feeling that you get when you bear witness to something that is that associated with death (that is, blood pouring from a wound)

Lybus,

That is a very keen insight, and it might explain why I don't mind seeing animal blood but can't tolerate the sight of human blood. I never thought of it as a physical manifestation of a deep-seated fear of death, but that really makes sense.

The only thing is it is usually from seeing what is in reality a minor wound. Even in the example I gave, it was in reality only a minor cut, just deep enough so that the blood coming out was darker than the blood from a paper cut.

Alex - I had blood drawn a few months ago, and became light-headed and started chuckling like an idiot when I saw my blood spurting out of my arm and into the vial.

What beautiful answers, Lybus.

I'm reading Vladimirs question and subsequent responses to Lybus a bit differently. He makes distinction between paper cut and shard of glass on hand/finger and also blood draws. Nor does he show phobia with animal blood-If it was a true blood phobia, Vlad would not like the paper cuts about as much as blood draws. -this to be seems to indicate not a true blood phobia but an injury phobia that has copious blood. Make sense?                                                  

 Understanding after reading Lybus that your sister was murdered for which I am so very sorry for your loss and deep pain you and your family have experienced. This gives me a bit of more info. To me it seems that you are experiencing a type of post traumatic stress that has hijacked your mental process to a physical injury that causes blood loss. I'm not clear if you had your blood phobia prior to your sisters death or if it has since been magnified as a result.      

Consider doing this exercise: write down the very worst thing that can possibly happen to you when you experience an injury with blood loss. Is it death? Is it a heart attack? Is it fainting? Also, write down the things that are vivid to you when you had the times of blood. Usually, somethings will loom larger in your recollection. Write those down, what they are. Now imagine your in a movie theater all alone. Looking at the blank screen, then you see you on the screen in the image that you shared; the glass shards at the sink perhaps.  Then I want you to be in the projection room, you're now looking at you sitting in the theater AND on the screen. When your now in the projection room, "change" the color to black and white on the screen. Specifically focusing on the glass shards, blood. The intensity is diminished and the separation of the scene your watching creates hopefully makes it smaller and less threatening. You in the projection room are simply an observer. You did not die. You did not have a heart attack, you did not faint or have a panic attack. (Whatever fears you wrote earlier).

This exercise gives you a different perspective on the incident(s) that create the anxiety, phobia. You need to step back and become an observer. This creates a different scenario for your brain to process mentally the injury. You are now taking away the power of the phobia and putting it in a context that is easier to process.  

Another thing that I have told patients if they have other types of medical phobias when they feel faint begin to squeeze their leg muscles, and continue the squeezing of large muscle groups upwards. Legs, diaphragm, stomach, back, biceps. This makes the 'fainting' feeling diminish as well. It IS a physical reaction when your feeling that faint, giddiness. It's your blood pressure dropping. That is why having the muscles squeezed helps to keep it from continued drop.

I have to get going but this is what I've decided to share to at least get you to understanding that you can begin to have control of this, it isn't instant but with some work you can see some relief. Further, you could consider going on YouTube and seeing films of blood draws and do processing that way to continue to tell your brain to not feed the fear, etc.  That's all for now. Take care Vlad.

                                                                               

I'm not clear if the reaction to blood is subconsciously related to my sister's death or not.

Well have you experienced this at all before her death? You sure it couldn't have manifested itself in some way other than what you've already described so far?