Step 1: Start Like This
Step 2: Erase
Move the toothpick layer so it seems like it is pointing out right from the hand. Not perfect! But it shall at least look like it can be a bit true, otherwise you got to capture new source images (or download at some place, but for this kinds of stuff it is almost easier to capture the photos yourself).
Step 3: Erase Again
Place the toothpick so it is in the right place and zoom in around the area where the wound will be.
Press [O] to activate the burn tool (watch out so you don't get the dodge or sponge tool) and choose a small brush size, 6 works for me. Change the exposure to somewhere between 5 and 20. It's often better to use low exposure and paint many times, than use high exposure a few times.
Now start to paint around the root of the toothpick so it shapes a circle around the "hole" through the hand.
Step 4: Get Brushes!
Step 5: Paint With Your Imported Brush
Create a new layer (blood) and place it between the toothpick layer and the hand layer.
Activate the imported brush and choose a good, blood-red color. Change the size (I used 862) and then paint once. One simple click, or two if the shape is to light.
Step 6: Warp the Blood! (and Make the Skin Look Weird)
Drag in the handles until the blood seems to be a bit more realistic.
Now duplicate the blood-layer and hide the original blood-layer. Rename the "blood copy"-layer to "skin". Erase everything on the skin-layer without the area around the hole, so what's left is shaped almost like a circle.
Warp the skin-layer (if you like to you can use Liquify instead. Filter --> Liquify)
Warp until it looks good. Right-click on "skin" and open the Blending Options menu. Click on Bevel and Emboss and choose the options shown in the image.
Set the Opacity on the skin-layer on 66% and fill 40%.
Step 7: Masking
Use a brush with the same diameter as the toothpick has, and paint over the toothstick. This will hide the "fakie-skin" so it looks a bit better.
Show the blood-layer again.
Step 8: Smudging
Open the blending options for the blood layer and use these settings:
Soon we're finished...
Step 9: Blood Spatter
To paint some more blood follow these steps:
Activate the toothpick-layer ctrl-click on the toothpick-layer to select it. This prevents blood to come on places you don't want it to be on.
Get a splatter brush (built in to photoshop) with low opacity and red color and start to paint a bit on the stick. Just a bit, and maybe some splashes with blood too.
Step 10: Extras and Saving
If you like to you can make the hand more grey (by adjusting black & white in Image --> Adjustments --> Black & White) or paint a bit more blood, like I did (either with the new brushes, or with some of the main-brushes). If you want more blood, paint it in the blood-layer to get the same effects as you already have on the main-blood.
Just saving left:
To save the image, press: File --> Save As... --> Write a name, change psd to jpg (or png or wathever you like) in the list below the name-form.
Then press Save and choose settings for the jpeg-compression, around ten works good.