While theories for MD are crucial, I think most of us agree that Diane is delusional, and has been dreaming/fantasizing through the first act. We desperately want to get all of the reality details correct, but that will always be tough or at least contentious.

So in an attempt to come up with new angles and material, let me start with something from Lynch himself. The following sentence comes from the Wikipedia page on MD.

Apart from both titles [Sunset Blvd.] referring to iconic Los Angeles streets, Mulholland Drive is "Lynch's unique account of what held Wilder's attention too: human putrefaction (a term Lynch used several times during his press conference at the New York Film Festival 2001) in a city of lethal illusions".

When Rita and Betty find the corpse at cottage #17, we ask who, what, when, and how concerning the deceased and the killer. Why is the mattress torn with shotgun blasts? (We know this from the script.) Don't the killers use silenced small caliber pistols?

But what is the most important thing about the scene from Lynch's point of view? (IMHO) That something is putrefying! Cottage #17 is where someone (still living) is putrefying psychologically from the body blows of multiple shotgun blasts delivered by the lethal Hollywood life. When the Cowboy wakes Diane and we see the juxtiposition of the corpse and sleeping Diane, it is symbolism that says "this is the (living) one that is decaying." The identity of the corpse is meaningless; it is a symbol.

What about the other killers in MD? Consider Ed's infamous "hair spike" protruding horizontally immediately after Joe shoots him.

This sequence also catches a flag from IMDB for a goof. Immediately after Ed is shot, the Italy poster is clean, then seconds later it is covered with Ed's blood. What the heck is going on here?

Remember that Diane (not just Betty) has actually been on some film sets as we see at timecode [2:03:25]. In addition to Camilla getting Diane parts, I suspect that Aunt Ruth may have taken her onto the sound stage before as well.

I think that the entire hitman massacre scene is Diane incorporating memories of B movie filmmaking into her fantasy. The hair spike? They shot a scene with a wig and squib/fake blood packet, hung the wig up wet, and shot more scenes the next day with the fake blood dry on the wig.

There are no real hit men, and the only killing is Diane's suicide at the end.

Another MD story I recall from somewhere is that Lynch fought with studio execs. who wanted to cut both the hit man massacre sequence (too much careless violence) and the dog poop scene. Setting aside the latter, what is so essential about the massacre, why keep it?

Well, it is true that it has action, careless violence, and even levity; in a film that needs a change-up in tenor at that point. But, it is the best example of something that we initially take as real plot, but isn't. "No hay banda!" Probably, elements of the sequence are supposed to be real. "The history of the world in phone numbers" is a reference to "Wonderland" and tags the black book as a listing of drug and prostitution contacts. Ed is the "manager" of this part of the Hollywood underbelly, and his keys are to the various flop-houses/rooms. The 1st act of MD is mostly wish fulfillment for Diane, and Diane has worked for Ed in the past and wants him dead.

Is there another "No hay banda!" scene candidate? In terms of the "feel" of the scene and a goof, I'd vote for the scene where Adam catches his wife in bed with the pool man. The goof is the bad foley in the kitchen.

However, if we take the cuckold scene as 100% film inside a film, then it blows up most of the standard plot line, especially the exposition of the dinner party in the 3rd act. Perhaps we are supposed to see the cuckold scene as Diane's mind mixing a bit of cheesy cinema in with the real facts of Adam's life.

very interesting thoughts, encrico, thanks for sharing them.
i especially like the explanation of the overlapping of the putrefying corpse and diane sleeping. i always wondered why the scene was that way.
as about the hitman scene, one theory i read about it was that it represents the guilt she feels for hiring a hitman in her real life, and thats why she dreamed of it.

Enrico wrote:

Apart from both titles [Sunset Blvd.] referring to iconic Los Angeles streets, Mulholland Drive is "Lynch's unique account of what held Wilder's attention too: human putrefaction (a term Lynch used several times during his press conference at the New York Film Festival 2001) in a city of lethal illusions".

That Martha Nochimson wrote an article which was cited in a Wikipedia article does not make it a fact. If she cites Billy Wilder's use of the word "putrefaction" along with Lynch's in her article, then she has a connection. If not, it is nothing more than a pseudo-intellectual connection of her own making. Then when someone cites it in a Wiki article, it appears to the reader as fact, when it is nothing of the sort.

Good point about Wikipedia. But the excerpt is quite clear about Lynch himself using this term. However, the part about a "city of lethal illusions" might be purely a Nochimson concoction. I found her article, but didn't feel like paying for it after reading the teaser intro paragraphs.

The more tedious avenue is to look at the dead girl as a process of elimination. Who is she? She appears to be a darker shade of blonde, but doesn't look like any of the blonde actresses. For while I thought she was Laney the prostitute, but Laney doesn't have any wrist bands, and the corpse doesn't have bangs like Laney does. (Somebody suggested a hospital wrist band, but it looks like a cream white plastic watch band to me.)

Then there are the other problems. Multiple shot gun blasts, but no visible torn flesh on the corpse? Incredibly loud blasts, but the corpse wasn't found for many days? Finally, the bed frame post looks like a phallic symbol in some of the corpse scenes, amplifying the symbolism.