The impossible structure of Lost Highway

I bet lots of people here have thought about the structure of this movie and I bet many will not find it surprising what I'm about to write. I just like to write my thoughts on the overall structure, because I believe it to be so inexplicable and probably the most complex structure in any Lynch movie.

At first glance the structure of LH seems pretty straight forward and even conventional. Fred has two fantasies: the first is weak and the second one is strong (simply put). Or to put in schematically:

Fantasy 1 (weak) - reality - Fantasy 2 (strong).

Seems pretty simple, doesn't it? But...let's examine this. Isn't it logical to assume that F1 is closer to reality than F2? I mean, the stronger F2 must be buried deeper in the unconscious than the F1, right? So far, everything is cool.

We now have to establish the direction of these fantasies, which seems pretty obvious also. Each fantasy starts out far from reality, only to lead (back) to reality itself. Like we hear Renee saying that they do not use the alarm system anymore, because it kept going off, while later in that fantasy we see Fred coming into the house and turning the alarm off. Both fantasies go chronologically backward but at the same time go TOWARDS reality. It's like Fred has created these fantasies forward and is playing them backwards. This too seems pretty logical to me.

Yet it is the connection between those two fantasies that is truly baffling. In F1 we hear at the beginning the word "Dick Laurent is dead" through the intercom. When Fred is walking towards the window, very slowly, to see who it was we hear police sirens in the background. When looks out the window he sees nobody. Now, as we all know, this is the ending of F2 except ecperienced from the other side.

In any other conventional movie this would seem as a "prequel" of the first part (and still it would have impossible implications). Of course it isn't because the protagonist is in both which would seem inpossible. Now consider this: if we are to assume that F2 is indeed deeper buried in the unconscious, how can it bee that this fantasy leads him towards discovering his own guilt and not F1 which is more on the surface? Furthermore, Fred's discovery of his own guilt isn't grounded in reality, but somewhere in his conscious: exactly between F1 and F2. This discovery isn't a revelation due to "seeing" the light by being confronted with reality, but actually an "eureka" moment somewhere in the mind. Absolutely amazing.

Still, we can consider another possible view. F2 may be deeper buried but the ending might be far more closer to reality than the ending of F1 (despite Fred being confronted with images of his actual crime). This would mean that Fred not only has come closer to reality in time, but also in space because he now is on the other side GIVING the statement "Dick Laurent is dead" instead of receiving it. Or is it just because Fred had buried the memory of his guilt so deep that it ONLY can be dug up with the "help" of a stronger fantasy? That would mean that the very F2 is indeed the downfall of Fred right from the start!

I guess we cannot consider these fantasies as being logical in the sense of time and space, only in chronological backward development. Fantasies just like dreams do not follow logical patterns like we are used to in reality. The unravelling of these fantasies toward the truth follow their own logic with only one constant: a path to reality. So when you look at the movie logically it has the appearance of an Escher painting: it all seems logical, but when you look closely you see it is impossible. Dreams and fantasies are such tricky things!