Has Fred done something so heinous that his entire reality is scrambled and the film is him trying to put the broken pieces back in place and make sense of what exactly happened? Sure...partly that is.
I personally think that his transformation into Pete happened within the movie, and the cops finding only Renee's picture in the photoframe also happened. The end is the beginning as well, and Lynch himself affirmed the loop theory circa 97'.
It's tempting to read…