Theory: What if literally everything past the first 12 mins is fantasy?

Not sure if this has been discussed at length here before... We all know at least 2 levels of the movie were fantasy; the brothel level, and the fantastical level (where they're fighting monsters and demons and planes and sh*t) ... But what if much of the base level of the movie, the scenes at the mental institution were imagined too?
The reason I say that is, in the first 12 minutes of the movie, Babydoll meets "The doctor/The High Roller" and he's positioning his mallet to drive a nail into Babydoll's head, then we escape into the "brothel" level... At which point new baddies, like the head orderly, come into play. Then they create this elaborate fantasy world with demons, german fighter planes, the works... Then when all the pieces of the puzzle come together, Babydoll gets caught, and "Sweetpea" escapes, we cut back to the same scene from near the beginning of the movie, with The Doctor standing over her in the exact same way, after performing the lobotomy.
I think most people underestimated the complexity of this movie. Not only was the fantastical world not real, but much of the "real world" was imagined, too.
In fact, I am willing to bet that Sweet Pea and Babydoll were the same person; one "escaped" from her bonds by breaking out of the institution. The other escaped the horrors of the hospital by going to a "happy place" after being lobotomized.
Thoughts?