Originally posted by Papercuts!You're right about the dream. The first three quarters of the movie is her pre-suicidal masturbatory fantasy. Diane has Camilla killed but then can't live with what she's done. So she commits suicide.
That's what I figured. The only thing that "really" happens in the movie is Diane puttering around her apartment in her robe, looking miserable and staring at the blue key, and then the suicide. Everything else is a dream/fantasy or a flashback (the dinner party, meeting the hitman at Winky's).
I'm still working on the blue box and Silencio. I'm thinking that the box is a symbol of her guilt and misery about what her life has become in reality as oppposed to ideally.
I'm also thinking the Silencio scene is a reflection of Diane's feelings towards Hollywood in general after her acting career has failed to take off the way she hoped it would.
The sequence at the club, the corpse, the frightened man inside the diner and the waitress all seem to be clues in Diane's subconscious that she's in a dream state. The emcee's patter at the club is about everything she's seeing as illusion (at which point Betty/Diane starts to shake violently), the man is talking about having a dream about the diner and everything in his dream being in real life, the corpse in the dream is actually her.
And I definitely agree that the box is a representation of the guilt she feels or the truth she's hiding. The "that which we must not know" of Sophoclean tragedy, and once she allows herself to see it, she can't live with the knowledge.
I'm starting to wonder, though, if there aren't supposed to be two levels of fantasy going on. There's the first level of real-to-dream, where Diane is a failed actress with a failed relationship with Camille, whom she has killed, and then she dreams the entire first two hours or so of the movie where Camille survives the hit and depends on Diane/Betty for survival and falls in love with her again. In this dream, she also explains her failure as an actress by creating the whole mafia/Cowboy/Guy In the Glass Booth conspiracy out to rob her of a successful career.
But there's something about a few of the transitions later in the movie that make me thing the whole Diane/Camille part is another fantasy, and that there was never a hitman. Diane and her neighbor seem like maybe they were lovers and broke up, and that's what all the packed up boxes and apartment switching is about. There's the matter of the little ceramic piano that the neighbor takes, which appears in the next scene with Camille, and the key itself. It feels like there's a possibility that the key is just the key that the neighbor gave back after they broke up, and Diane turns it first into the hitman's key in that dream, and later into the futuristic spiritual key in the earlier dream.
It's really fascinating how he took the pilot he shot and turned it into something completely different by adding those last 20 minutes from the club on (I'm guessing) and the extra minute or so before the Mulholland Drive street sign appears.