An interpretation.

Rating: 9/10 (6 April 2018)

To explain my take would take a very long time, so I will just mention a couple of aspects ... the film is shot through with references to Greek mythology ... note that the old people in the early sequences are exaggeratedly kind and smiley ... and in the later scenes how they harass and drive Diane to madness? ... the old lady says her name is Irene ... in Greek myths, the Eryines are entities which can either be "The Kindly Ones", which is what the name means, but they are also The Furies, who hound and harass the guilty, especially those guilty of murder, to madness and death. In both roles they preside over justice.
Another Greek myth is represented by the mysterious blue box, which, when it is opened by Betty/Diane, brings her back to the sordid, crime ridden world of the second half, after the suspiciously glamorous and successful first half populated by "Betty" and "Rita" ... this, I believe is Pandora's box, which released all the evils of the world ... it is also probably a reference to Alice's rabbit-hole, which also takes her to what I believe is a nightmarish, rather than a dream world. The scenes in the diner belong to the evil world of the second half, but they leak into the dream world as flashes of reality into "Betty's" consciousness.,
There is also a scene in the cafe, where, hardly noticed in the background, a body is dumped in a dumpster ... was this the body of Camilla, killed by the hitman Diane hired? This, I believe is the guilt Diane experiences as her lover's murderer
So, the first part represents the fantasy life that Diane, as "Betty" has constructed for herself ... see how easily she waltzes into a very successful audition? ... after the box, she is plunged into a much harder, philistine, money and gangster dominated, cynical world of Hollywood, symbolised by the hideous man at the back of the diner, and by the cowboy.