'Safe' as an AIDS movie
It seems to me that the disease is actually AIDS, striking some scattered heterosexuals at a time when no one was looking for it and resulting in hysteria.
Many critics have read the disease as a metaphor for AIDS and the film as an analogy to the 1980's experience of AIDS generally. Observe that Todd Haynes was a founding member of Gran Fury, "one of the earliest, and most influential, pioneers of AIDS activism through art..., an artists' collective formed in 1988... [they] sought to create a public, non-museum role for art that attempted to inform a broad public and provoke direct action to end the AIDS crisis."
But I think you can interpret the film as being literally, not metaphorically, about AIDS and mysteriousness of AIDS-related symptoms in heterosexuals at a time when HIV/AIDS was thought to be a gay disease. Lots of elements fall into place if you suppose that the disease actually is AIDS.
Some evidence:
1. Consider the other people in the commune: a kid who thinks he got sick "because of all the drugs I took" (needles), a woman who got sick and soon later her husband Nell got sick (one gave the other HIV, she developed symptoms first), a woman whose child got sick then later she did (she was infected, passed it on through the womb, and he, being a child, developed symptoms first), a very effeminate man who probably has had sex with men (the one who tries to pick up Carole at the end), a woman who was raped as a child, and Carole. Notice that Carole's stepson is about 10-13, meaning that the marriage is probably newer than 10 years old, meaning that she could have been having sex with other people in the relevant time (untreated, it takes about 9-11 years, sometimes many more, for symptoms to develop after infection).
2. The movie was made in the mid-90s, but Haynes takes great pains to show us that it takes place in the 80s (those dresses! hairstyles!). The opening scene tells us it's 1987, when AIDS was still thought of as a gay disease, when HIV testing wasn't widespread, and when people didn't know much about it.
3. The symptoms, on this reading, are a mix of real AIDS-related symptoms (catch the lesion on her head) and paranoia-induced reactions (the reaction to her husband's cologne and the nearby freeway are "in her head").
Notice that we're explicitly told that Peter, the cult leader with the huge mansion, actually does have AIDS. This raises new questions about the character: is he, for monetary gain, luring in unknowningly-HIV+ people and telling them that they have a mysterious disease that only he and the commune can help them with?
I'm sure there are flaws with this interpretation, and I'd like to hear what you think.