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Diane was murdered

Diane met Camilla on the set of the Sylvia North Story. Camilla and Diane became friends, Camilla was an unknown at the time, just like the blonde Camilla shown in the dream sequence. She had powerful friends (Castigliane bros.) who put her in the starring role. She did not succeed by talent alone. She and Diane had a brief sexual relationship. During this time, Camilla used her influence to get Diane small parts in films.

Camilla’s success was due to her ties to the Castigliane bros., and they also dictated to her the way she should live her life and the image she should project to the public. They advised her that she should stay away from Diane. The risk of her lesbian affair getting out (due to a highly volatile Diane) would be contrary to her image, which seems from looking at her role in the Sylvia North story, which probably launched her career, to be rather old fashioned and wholesome, a 1950’s type heroine. The Castigliane brothers stood to lose a substantial amount of their investment in this girl if it became public that she was a lesbian. That was not the kind of attention Camilla needed at this early stage in her career.

So we see the love scene on the couch. Yes, Camilla is very attracted to Diane. If you say she was "slumming", well, sometimes we can’t help who we’re attracted to. In fact, in Aunt Ruth’s kitchen a bowl of "forbidden fruit" appears magically where the bunch of keys were. The Castigliane brothers, knowing her weakness for women, introduced her to blonde Camilla, who was in their circles and was a woman who could be trusted. They "owned" blonde Camilla as well.

Anyway, Camilla was strong-armed into breaking off the relationship. Diane assumed it was because of Adam, and she was partially right. The Castigliane brothers took Adam under their wing as well, as shown in dream sequence, he was given an ultimatum, made the right choice and is doing what he can to prove his loyalty, including his romantic involvement with Camilla…I believe his mother, Coco, is very savvy to the ways of the world and especially Hollywood (she's been around that scene for a while) and knows exactly what is going on. She is somewhat disgusted with the whole thing but knows her place, and must play along. Inside she feels pity for Diane, but cannot show it overtly for fear of Mr. Castigliane, thus the subtle eye rolls, polite conversation, and finally the "I’m sorry, dear" handpat. Remember, Mr. Castigliane is watching very intently. He needs Diane to have an emotional breakdown in front of many witnesses…

The girl is still missing - Diane is late for the pool party. The car is waiting. It is very important that Diane be seen at the party and can be seen as visibly upset. She is lured into a trap - one that sets up her murder. Yes, I believe Diane was murdered by the Castigliane brothers and they made it look like a suicide, even to us. The old people in the beginning get into a limo and later they drive Diane to her death. It is the Castigliane brothers’ limo.

Who is eyebrow guy? The Castigliane brothers have been watching Diane’s every move. They know about the hit. They know about the blue key. Troubled eyebrow guy has heard everything or at least saw the picture and the key. The Castigliane brothers’ hitman talks to Joe.

This is how it goes in the dream. Joe kills Ed and makes it look like a suicide. He takes the black book, which represents the key. Joe represents the Castigliane’s hitman and his later MO with Diane. He is wearing the trademark gangster pinky ring. He engages Ed in conversation. Ed mentions an accident, laughing about it. Joe says, "I hope you're not going to get in any trouble". In the dream, an accident prevents Camilla from getting killed. In reality, I believe Diane paid Joe to have Camilla hurt in some way but Joe had no intention of doing so. He ripped her off and laughed about it, telling every detail to CB hitman who killed Joe and took the key.

Adams cowardly act of revenge towards his wife leaves him marked with pink paint, much like Diane’s cowardly act of revenge leaves her marked for death. That is why the scene with the hooker when Joe is looking for a "new girl on the street" has such a pink theme.

Who is the homeless woman? Possibly represents the horrible, treacherous, ugly events that take place to preserve the image of beauty and purity. Troubled Guy (Diane) knows about it, confides in someone, threatens to expose it and it kills him/her. That it why it is shown killing Diane at the end. That is the meaning of the smoke, the illusion, Club Silencio. As long as the illusion is preserved, the blue haired lady lives. As long as sacrifices are brought into Club Silencio, as Rita brought Betty, she stays beautiful. The blue box is club Silencio. The homeless woman is the blue haired lady. That is why it looks to be the same path to CS as to behind Winkie’s. That is why HW has the box and why Betty is given the box. Betty (Diane) has been sacrificed. Rita (Camilla) decides to take her to Club Silencio rather than follow her heart and return Betty’s love. The song "Crying" represents this choice.