Here's an analysis that I stumbled across yesterday. I'm not going to bat for everything in it, but I think it's a good read because it's pretty well grounded and - as the author says at the outset - deals with "the donut and not the hole." You can stay with it the whole way and not feel like you've made any wild leaps of logic.

http://metaltrenches.com//reviews/what-the-hell-a-twin-peaks-analysis-1103

What I like most is the understanding of dream logic, especially those moments that tip us off that we are dreaming. This author calls them the moments when we start to notice the "cracks in our reality." We've all had them: those times when you're still asleep but suddenly you cross some line where you realize there's no way in hell that can be real. In that moment, you're aware of being both the dreamer and a character in the dream (usually half-a-second before you wake up).

The author thinks Cooper is having one of those moments when his face is superimposed over the scene in the sheriff's station. Suddenly he's both in a dream and aware of dreaming. (But read the article for a better sense of what's meant by "dreaming.")

As a parallel, the author identifies a handful of moments when we, the viewer, should be cued that we're experiencing some sort of dream. A couple examples include the dead guy in Carrie's house and the sheer bizarreness of the vomiting kid in the car. Something's off. The logic starts to break down. We see the cracks in our reality - or we should, except maybe our minds are too blown to notice. 

I also like the author's take on Audrey. In this analysis, she's not the "meta-dreamer" who's dreaming this whole thing, but she sets an example for how we should maybe be reacting to a lot of this – because she's having one of those moments too. She's startled awake as her reality starts to crack and is thrust into a completely different realm of experience. Has she actually gone anywhere in space or time? We want to say no: she's simply woken up. But in this show, can it amount to the same thing?