Alright, be warned that I am quite drunk, and likely to not make a lot of sense. Nevertheless, I will try to answer your question.
Jacob's Ladder was much like Silent Hill in that almost everything was presented in a very obvious manner. There was very little subtlety involved, and the story was presented in a clear manner, yet a paradox was very evident. Donnie Darko was different in that much of the story was left to the viewer's interpretation, yet I felt that a clear theme was underlying the movie. I felt that if I could break the symbolic bonds, I could free the intent and purpose of the movie. I actually considered posting a thread in this very forum specifically for Donnie Darko. Yet I watched the movie with the director's commentary just so I would be able to better understand it, and I came to a shocking discovery.
Fact of the matter is, Donnie Darko didn't go insane, according to the director. He considered it to be a science fiction story in which the main character is hyper sensitive, but perfectly sane. To me, this doesn't sit very well. I think that the "they" that he speaks of is Donnie's own mind. He is creating Frank from his own half forgotten memories of time not yet past. He is caught in a time loop, and it's impossible for him to escape until he makes the right decision. He is obviously insane already from his past events, making him easily accessable from the powers that be. Much like groundhog day, he is trapped in a repeating world for him that his making him unconsciously aware of what must be done. Frank, and everything else is a fiction created by his own mind and nobody elses.
And so ends my theory of the movie. I simply CANNOT accept the director's simple explanation.