I'm suprised no one has said anything about the FOV (Field of View) When you are playing. Everything looks really zoomed in.
It's because the FOV is set as 65 rather than 90 which almost most games have.
See here how to change it, it makes the game so much better just check the screenshots out.
There have been people claiming to have a FOV fix that involves hex editing some *.dll files which is a big no-no for VAC, which can result in you being banned, there is a much easier way to edit the CameraDefaultFOV cvar located in Data0.pak/Data/Skills/default_levels.xml
To do so, simply extract the file, locate your Dead Island folder in your user's documents folder, where your audio and video settings are already saved, and create a "Data" folder, a "Skills" subfolder, and place the default_levels.xml in the skills sub folder. Open the file, edit away.
Screenshots:
90 degree FOV:
http://i.imgur.com/ZG9pe.jpg
62.5 (default) FOV:
http://i.imgur.com/w8H3e.jpg
To be clear, your DeadIsland folder should have this structure:
DeadIsland
->out
->->data
->->->skills
->->->->default_levels.xml
->->logs
->->settings