There are no answers here.

Everyone wants to rationalize this movie, but that's missing the point. Lynch says over and over that ideas come to him and he works them in as he sees fit. His movies are impressionist, you have to take a step back and enjoy the emotional impression they leave on you, NOT the logical narrative cause-and-effect chain of events. If you're looking for a grounded, rational answer to what is happening in the movie, nothing will ever satisfy you or make complete sense. The point is to just enjoy the darkness and the mystery and the chaos and the magic and all the feelings it stirs up inside of you. It is a montage of events seemingly causally related, that are only united by your own imagination and not by any actual cohesive story. When you walk away, you are supposed to feel confused. While you are watching, the vagueness often leads you to conclusions, and this is where the movie is working, when you impress your own meaning on the events, and not in the promise of rational answers.

Cheers.