Sentence makes sense and is well-constructed.

• seems would seem = both work, but the use of “would” expresses uncertainty. is
• vs was = only depends on whether the situation they’re speaking of is the present or happened in the past we
• feared vs we had feared = use of the past perfect specifies an action that occurred before some other action. (Then they feared for their situation just one day, and finally they assessed their situation for something else

and found it was a great deal worse.)