Horror story

I was feeling happy as Black - I had won a pawn in the opening and had just castled, catching up on development.

White's next move came as a very nasty shock ...

Is something wrong with 1. Bh6?

Anyway - what's the "horror" story?

1. Bh6 is what I was expecting. After 1...Ne8, White's attack fizzles out quickly. (Black can drive the bishop away with 2...Kh8.)

1. Bc7 was definitely an unexpected horror, at least as far as I was concerned.

Well:...

2. Bh5 discourages 2... Kh8, but it doesn't actually threaten anything new. Black can also unravel his position with 2....Bd6:

I said 3. Rxf7

@GSHAPIROY You said 3. Rxf7 after 2... Kh8. That's in the notes. It leads to a roughly equal position after 3...Rxf7.

After 3...gxh6?  4. Rxh7+ is imaginative but throws away White's advantage. 4...Kxh7 5. Qg6+ Kh8 6. Qxh6+ Kg8 7. Bg6? Rf7 8. Bxf7+ Kxf7 9. Qh6 Ng7 wins easily for Black. (White can draw by playing 7. Qxe6+ instead, but I don't think he can do better than that.)

After 2...Bd6 - the main line in my diagram - 2...Rxf7? would lose immediately to 3...Bxg3.

I would play 3. Qg4 in your line then