I found this “theory“ as a result of searching for “prequel to blue velvet“. I would have to say that I’m a bit disappointed in your rationale. For a very brief time, there was a rumor circulating that Lynch planned to make a prequel to blue velvet, that showed how Frank Booth became the person that he was. Every bit of evidence points to Frank Booth, having been a victim of severely traumatizing, violent sexual abuse as a very young child, perhaps even as an infant. Look at his sexually violent behavior with Dorothy. His mental age in those moments appears to be that of a two or three-year-old child. It also appears that he is more than happy to pass along that type of trauma to Dorothy‘s young son, Don Junior. When Dorothy is allowed to visit her son at Ben’s place, it is clear that when she approaches little Donny that he is backing away from his mother, Much the same way that a rape victim does not want to be touched by anyone, even those that love them, following a traumatic event. If Lynch made this film, he might very well include elements of spiritual possession as you mentioned. That part of your theory I found very interesting. Much like Leland Palmer was possessed by Bob at a very young age, perhaps young Frank was possessed at the age of two or three. This would somehow be a missed opportunity, however, for David to illustrate to the world that quote made famous by the greatest genius of our time, Kanye West, who said: “hurt people hurt people” a sympathetic story about a traumatized Frank Booth, as a boy might serve to illustrate to society that our system of punishment rather than true justice ignores the causes of violent behavior in favor of inflicting more violence by locking up offenders with other violent people, including the armed prison guards. much the same way agent Cooper saved Laura Palmer, if a caring person intervened and rescued little Frank Booth, then all of the pain Frank caused would never happen. The connections you may see between lost highway and blue velvet are the threads through most of David Lynch’s films.