I recently encountered a brilliant fan theory online about The Big Lebowski. To wit: Donnie isn't real. He exists only in Walter’s imagination.
Notice almost all Donnie’s interactions are with Walter alone. Yes, the Dude does acknowledge Donnie, once or twice, cursorily. To keep the peace, the Dude humors Walter's delusion.
There was a real "Theodore Donald Kerabatsos" but he's long deceased. He died, like so many young men of his generation, before his time, face down in the muck of Vietnam. Or perhaps he expired in Walter's arms while waiting the medics. Either way, Donnie is a memory--or more specifically, a PTS-induced hallucination.
Think about it. Why does the Dude’s bowling team have three members while Jesus’s has only two? Answer: It doesn’t. Because Donnie’s not really there.
The Stranger knows about Donnie, of course. After all, he's sad to see him go. But the Stranger seems to be a supernatural entity, privy to all the shit.
The only thing that doesn’t quite ring true about the theory is the vehemence of the Dude’s reaction to Walter’s oafishness during the funeral scene. And I guess the undertaker from the prior scene would have to have been in on the game, which might be a stretch. Other than that, however, I think it’s an uncannily plausible interpretation.
I’d like to see a new version of Lebowski in which Donnie is digitally erased. Walter’s habit of heaping scathing abuse against someone no-one else can see would underscore the terrifying insanity that leads him to draw a pistol over an argument in a bowling alley, roll out of a moving vehicle with an automatic weapon, assault a paraplegic, and rip off a nihilist’s ear with his teeth.
I fleshed out some of the details of the theory here, but I can't take credit for it. I have it from Jeff Bridges himself, who mentioned it during a round table discussion with John Goodman and Steve Buscemi. You can probably still find it on Youtube.