i saw the rerelease tonight and thought i'd add to this
i think the old lady, in writing her book, laid out donnie's journey into schizophrenia followed by esp visions. the fuselage that hit his room the first time was from the plane that killed his mother and little sister at the end of the movie - there was a time schism created in the storm that donnie watches from the hill, leading to the confused non-plane crash. donnie rerouted future events by rewinding events and returning to his bed to die the night of the freak accident, protecting his girlfriend and family and preventing his mom from getting on the flight with his kid sister. although he spared patrick swayze the child molester.
so i think the area where donnie lived had an active wormhole that the old woman discovered in her own schizoid journey..
sort of reminds me of mullholland drive
now i need to listen to the extras on the dvd..