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In the beginning Hamlet dies, and everyone thinks its because of natural causes. Hamlet's ghost appears and visits his son, Hamlet, and reveals that he was murdered by his own brother, Claudius. Hamlet is then told to avenge his father's death by killing his new step-father, which is also his uncle. Which shows that there is something "rotten" and wrong if a king is murdered and nothing is done about it"
Secondly, the way Hamlet "acts" insane proves there is obviously something wrong. Hamlet is a role model to others and has the affection of a woman and him acting crazy, shows his immaturity, and lack of leading skills needed to be king. He ruins his chance of being king by acting the why that he does.
Finally, the political problems prove the "rotten" state of Denmark. There is no prosecution of Claudius, for committing murder. The relationship with neighboring countries is unstable, and the problems with the king. The murders that take place are for revenge, or other foolish reasons, are simply unacceptable and the fact no one in punished by the law, is blatantly obvious something is wrong in Denmark.
In conclusion, the many internal flaws and problems proves there is in fact "something rotten in Denmark...." Shakespeare makes it clear throughout the entire play; especially by character flaws and governmental problems.