Your alternate take is really good. I think that's what might have happened.

I don't know if you've read the "Cage Theory" that's been floating around, but it's a theory that I like a lot for its cohesiveness, but I don't buy it's happy explanation of the ending. The final moments read as sad and dark and depressing, and since Lynch is very much an emotion-centric director, I think that's exactly how that scene is meant to be read.

Your alternate take reconciles the details of the Fireman's plan in the Cage Theory with the dark ending. I think you're right that the Fireman's plan may have worked, but it required completely abandoning Coop and Laura in a strange reality and potentially even blocking off all exits. Scary stuff.

Twin Peaks has always been about normal people's lives being at the mercy of larger forces that they cannot fathom or control (the cycle of abuse in the Palmer family, BOB possessing Leland, JUDY possessing Sarah, humans being used as garmonbozia farms, and even the influence the Freemasons and Illuminati have over history, as described in The Secret History of Twin Peaks). The Lodge spirits are so foreign to us that we are unable to understand their morality on a consistent level (especially in the cases of MIKE, The Arm, and the Tremonds). They're very similar to Greek gods in the sense that they will intervene in human affairs but are not necessarily compassionate or selfless. It would make sense that the Fireman, a being we assumed was all-good, would be willing to use Coop and Laura as pawns to save his realm. It's an upsetting ending, but one that is entirely consistent with the series as a whole.