The faces in the ring were basically the special effects guys saying "how freaky can we make this?" Amazingly, the ones in the movie were used because they werent as scary as their first set, and they were going for a pg-13 rating. Imagine how bad
those had to be.....
they do give you a hint as to what is supposed to be happening jsut before they both die:
Their faces are distorted in horror. Samara scared them to death, and it was so intense, it actually distorted their features.