This doesn't work for a couple of reasons. DuVall has tattoos in some places on her arms and legs. I don't think a 17 year old girl in the podunk, hippy commune nee fish village she lives in would have this many tattoos in 1986. One of Cally's little straight boyfriends wears one of her dresses in the film's first 20 minutes or so. Guys didn't do this in 1986.
Traveler plays a gig in the film.
The only reason I can see to set the film in 1986 is that if Daryl Hannah was around in the hippy days of 1968 when Cally was supposedly born it would made Cally 32 and Hannah's artist, well, pretty damn old. This film can't arrange suspension of disbelief to save it's life. It doesn't try to. You know, it's weird. While I was watching the film, I didn't hate it.