So this all could be nonsense and full of holes, but here's one possible explantion.
When Cooper saves Laura in the forest, an enraged Judy takes her away and imprisons her within her own dream - "the dreamer who dreams, and then lives inside the dream" (This could echo what happens to Audrey).
But this dream is more than a simple dream; it's an alternate reality that can be physically crossed into. So Cooper and Diane travel into this alternate world/dream to bring her back. Cooper takes Laura to her home in an attempt to wake her up from this alternate world/dream. She screams because she remembers everything and wakes. This could actually be a somewhat happy ending. Although what happens when she wakes is another story.
Now for the above in more detail:
Have you ever had dreams where the characters are amalgamations of people you know, or look like one person, but have the personality of another? Or where they're not the exact representation of the people you know in real life.
I think this is what happens in Laura's dream world /alternate reality. People's personalities and memories are subsumed by another; but deep down they are still essentially the same person. Diane quickly loses her sense of who she is and becomes Linda. Cooper is also changed, possibly now unaware that he's in a dream, but not enough for him to lose all his memory and identity.
When the giant says to remember 'Richard and Linda' maybe that is a warning to Cooper to keep hold of his true self and not lose himself.
Laura is almost totally subsumed by her new personality, but there's enough still there for her memory to be triggered by seeing her old house. There is a crackle of electricity which i think is Laura waking up or crossing back to reality, in the same way Audrey's return to reality is preceded by a crackle of electricity. The sound of electricity is often there when characters cross realms - Cooper when leaving the black lodge and when entering Laura's dream; Mr C when he's booted out of the place where he speaks to Jeffries.
I think Cooper asks what year it is because it's his only explanation of why Sarah Palmer isn't there. He's now forgotten that he is in a dream and that things shift and change in dreams (like the motel/car).
It could also explain the superimposed face of Cooper in the sheriff's department. It's Cooper, at the end, remembering the past and realising that he's in a dream. When he says "we're inside a dream" he could be saying it to Laura.
Maybe that all those who disappear (Jeffries, Cooper, Diane, Laura) are imprisoned within their own dreams/alternate reality. For example, in FWWM when Jeffries is asked where he's been for 2 years, he says 'it was a dream, we live(d) inside a dream'. Certainly explains why he's now a kettle!
Lynch loves the paintings of Francis Bacon. Bacon loved the work of Eisenstein and especially the famous Odessa Steps sequence from the film Battleship Potemkin. I think the dead guy sitting in the chair refers to the individuals killed in that famous film sequence and the town of Odessa, TX is a nod to the sequence.
OK here's a theory because why not. All of reality, and I mean our "real reality" of planet earth- from Kim Jung Un to the rings of Saturn- is the collective "dream" of all sentient life and/or God. We collectively interpret/dream the random energies of our cosmos into physical structures bound by time. So that we can live- so we can eat pizza, have sex and get frustrated by TV Season finales, etc. It's a collective dream that can't be broken or interrupted, except maybe by big shots like Mohammed or Christ.
Meanwhile, within our dream world, we have individual random thoughts. We have individual dreams within the dream, not shared by everyone. Art. Stories. Comic Book mythologies. Concept albums. All of these imagined things are "real" somewhere because if we can imagine it, it exists somewhere. But not here in our "shared" dream universe, elsewhere in other dimensions or realities. Because they are not the collective dreams of us all, they are less developed, even fragmented and random. Often nightmares.
Now apply this to Twin Peaks. The world of Twin Peaks, from the town itself to Vegas and to New York, is the collective dream of all it's sentient denizens. Only in this world, there are more big shots that can break the rules.. Because cracks in time and space allow entities from it's alternate dimensions to influence and or cross over into the otherwise "real" world of Twin Peaks. (Thanks, Oppenheimer.)
So, some of the alternate realities/other dimensions of the world of Twin Peaks include the Red Room, Mauve Room, Black Lodge, White Lodge.. Dutchman. Unlike the larger collective reality of the world of Twin Peaks, these are smaller realities, dreamt up by individuals or smaller groups. Hence the often simplistic or monochromatic look of things in these places. And those singular dreamers or creators are thus very powerful within their realms. When the malevolent of these places tries to creep into the world of Twin Peaks, bad things happen.
I think some of this combined with much of what has been said here in these forums is true. Its pretty heavy. Real meta and deep. All I really wanted was maybe 30 minutes or so of Coop catching up with Gordon, Albert, Bobby and Hawk over coffee.
Fire walk with