Had Toshio always been alive in the first movie or was he a ghost of some sort?

This answer is really late wow...Anyways.
I'm pretty sure he's always been a ghost because in the first movie they do say that the events that happened in the house were a past occurrence and that the hauntings have been going on for a while. Hope that helps!

I agree w/Alphearia in that Toshio was always a ghost in the first Grudge. What confused me was how sometimes he appeared "normal" and other times he was ghostly looking. It also took me 2 viewings to catch on that the story was told in a non-linear way! Anyway, I interpreted Toshio's ghost-like appearance to be a harbinger of death.