A newborn boy with congenital hydrocephalus was diagnosed with aqueductal stenosis using magnetic resonance imaging. Low-resistance ventriculoperitoneal shunt placement was followed by clinical deterioration. Repeat imaging studies revealed a collapsed cortical mantle with subdural hemorrhage. In addition to subdural blood, often associated with marked cerebral conformational changes, extensive intraparenchymal hemorrhage was seen. For extreme congenital hydrocephalus, ventriculoperitoneal shunts with greater resistance to flow than the currently used neonatal shunt devices may be indicated, to allow a more gradual ventricular decompression.