After my initial jaw dropping reaction to the end of episode 18 I took some time to sleep on it. I then realized that the expectation of meaning and explanation was pointless – which is exactly the point! If it doesn't make sense it is absurd!
Twin Peaks is existential philosophy in the form of Theater of the Absurd. Franz Kafka, Samuel Beckett and other play writes wrote existential / absurdist works. Lynch gives a clue he is working in the Theater of the Absurd. He hung a picture of Franz Kafka on Gordon Cole's office wall!
The absurdist movement began after World War II (mushroom cloud poster) and is generally thought to have more or less ended with death of Samuel Beckett (a big influence in the absurdist movement, Waiting for Godot is his most famous work) in December of 1989.
Characteristics of Theater of the Absurd are no plot, repetitive / cyclic and pointless actions, no conventional structure, it incorporates broad comedy including elements of circus, vaudeville, slapstick, magic, word play. Human beings are portrayed to be trapped in an illogical world that has no meaning, general pointlessness and the idea that no matter what people do it all will lead to the same pointless end. Think of the Greek myth of Sisyphus who was condemned to pushing a boulder up hill only to have it roll down again. Sisyphus pushes the boulder back up and it rolls down again, he pushes it up and it rolls down again and again and again for all eternity.
Absurdist works offer no explanations and no solutions. They are surreal, not logical, right brain, not left-brain. They reject realism and the rules of traditional playwriting that have a beginning, middle and end. If absurdist plays were paintings they would be Salvador Dali as opposed to Rembrandt. Rembrandt could not paint Twin Peaks but Dali could!
How can you leave out Albert "Mr Absurd" Camus?