My initial take might seem a bit pessimistic? Even now I’m still unsure of how I feel entirely about it and whether I actually want to think about it in such a way. Nor do I recall every detail that led me to my own conclusion. But the most basic way I can put it is that at least as far as The Return is concerned, it acts both as peeling back layers of fiction to get closer to the truth as well as a meta commentary on trying to bring back a beloved show and the way people put so much importance on old tropes that don’t fit the modern world so well.
To try to break it down, I feel like Cooper is in a dream, perhaps either reliving or actively dreaming about the case of Laura Palmer and everything that may have actually happened around her and in the town of Twin Peaks, and how that has affected his relationship with and estranged him from Diane, who seems like a character for him to simply bounce off of to start but made far more important and definitely in a romantic aspect in the Return. When the layer peels back and their names are revealed to be Richard and Linda (if I’m remembering right), I think that is a part of the layer of fiction being peeled back to show what may be “true”.
From here I might be rambling a bit, mostly just trying to job my brain for details. Diane being revealed to have red hair and black and white nails towards the end I think is significant in showing the Black Lodge and different aspects about it were related to her and suppression of memories, emotions, and different aspects of Cooper. Between himself, the nearly vegetative state of Dougie, and the mercilessness of Mr. C, I believe those were all present in Richard and shown in the last episode in both awkward mannerisms and how he handled the men in the diner. It may not matter as much but I feel it is interesting to note Mr. C seemed to only ever harm people that were also criminals themselves, though it is hard to say whether he might have hurt others at the sheriff’s department.
Another thing is the ring that seemed to connect those who wore it to the lodge. I think the extended scene was technically cut, but there is one from Fire Walk With Me wherein Bob accepts the ring from the Man from another place if I recall correctly, and though it is strange in the usual Lynch sense, I find it intriguing it’s framed as a sort of marriage. I don’t remember it as much, whether Mike had ever worn the ring, but with his left arm being cut off and him also having cut ties with Bob and being technically on Cooper’s side, I think that represents him trying to deny his past.
I feel like there was plenty more I had. Stuff to do with Jeffries, wanting to go back in time to save Laura, the one he finds much older possibly just being some stranger in some trouble using him as an excuse to get out. But really I don’t think my theory covers everything about the entirety of the show so well, with so many other characters. Even so I feel it’s worth getting out there and I’m interested in hearing from other fans with different ideas. All I know is Twin Peaks has had me interested in analyzing dreams in particular and how people study them, and watching Lynch’s other films I feel like looking at them at least in a more abstract way is less frustrating and much more fun.