I thought I had this figured out....
A friend of mine and I just rewatched this on DVD. I hadn't seen it for a while. I thought I had it all figured out.
Here is what confuses me; on the dvd you can watch deleted scenes. John (the editor) says over the phone, "the new story isn't about my daughter is it?" Sarah tells him no. So, Julie does indeed exist.
Is everything that happens at the house, all of it, Sarah's new book or is her new book about Julie's mother's book that was supposedly burned?
And did Sarah really help cover up the murder or is that also part of her book?