Agreed. There are many different interpretations possible. Ones where Kate is manipulative, conniving or an innocent or just a normal girl who genuinely falls in love with her twin brother.
To me it seemed like a tragic love story as I saw Kate and Ned falling in love. Ned was fighting his feelings for her and trying to be the responsible one. Kate was the opposite and gave into her feelings for him.
After they have sex by the pond, their sibling dynamic totally changes as Ned cannot see her as his sister but as a girl he wants to be with. Kate was more child like in her manner. After the sex, Ned immediately apologizes because he sees the situation in its seriousness, as an adult and he knows it was a taboo. Kate's immediate reaction is more lighthearted as she goes into the water to wash and sings some nursery rhyme "if your happy and you know it clap your hands...". She is happy and totally at ease. She even tried to make Ned feel better by telling him he can think of her as someone else if it hurts so much.
Kate treats Ned as a brother/ childhood friend whom she has grown to love. When he rejects her, she tells Cliff an extremely mild version of the truth to get Ned's attention. It reminded me of a teenage drama, if it weren't for the incest. The girl complains to her older brother so that the boyfriend would be warned about treating her right. I think that's how far as she had planned it. She probably assumed that Cliff, being the nice guy, would talk to Ned. I don't think she had anticipated that Ned was so torn up with guilt that he would invite the fight with Cliff. Her kissing Ned could be seen as her affection for her brother and an apology whereas her reaction to Ned was more womanly and passionate as she mouths that she hates him basically for beating up the mild mannered Cliff.
Then we see the chemistry and sexual tension between Ned and Kate at the dance. The song in the background cannot be a total coincidence. The lyrics "I know I didn't treat you right... you were always on my mind" basically sums up their feelings. Ned is jolted out of the moment when someone pushes him and then he rejects Kate's invitation to leave the party early. Again, he's freaked out by his own feelings and the fact that Kate does not hold back her's at all. He harshly rejects her and immediately goes and has sex with another girl to forget about Kate.
Crushed by being rejected again, Kate turns to Cliff for comfort. It is possible that she could have had sex with Cliff in the car before the accident as Sally suggested. It is one interpretation, thought I beg to differ.
It is equally possible that Kate was really upset and Cliff consoled her as a brother/ best friend. Kate could have spent all that time telling Cliff what happened between her and Ned. It would have to have been a long conversation. How many of us have spent an entire night talking to a friend who also knows our partner, trying to understand and dissect the relationship and just figure things out. Here the situation is so much more complicated.
Cliff was supposed to be "weaker", basically a more sensitive person whom the father was trying to toughen up. Knowing the truth, Cliff would have been understandably devastated and distracted enough to not react in time, resulting in a crash. Kate was killed and Cliff would have carried the burden of not only causing her death but also knowing her secret.
Cliff may have been able to live with the secret and even been the couple's protector, but only if Kate had lived. His suicide was an act of forgiving Ned and saving him from their father's wrath. He saw the whole thing situation as ending with his own death as Ned was already putting a stop to it from his side. Cliff may have blamed himself for the death of not only a daughter and sister but also of the girl that his brother loved. How would he face them all? How would he react to Ned? In anger or as a loving confidant? His feelings were so conflicted, his guilt so great that he commits suicide.
Sally was a young girl at the time. She may have known the truth about Ned and Kate but I think her conclusion about Kate and Cliff is based on a assumption. She see's Ned and Kate's relationship as a taboo, something for which Ned needed to be forgiven. So naturally she thinks Kate was messed up and therefore also assumes the worst of Cliff.
In all honestly, my interpretation may not be the director's intention since Ned is clearly meant to be guilty and self harming and finally atones for his sins and is forgiven by the virtuous Sally, who is meant to be the father's "true achievement". But I find my interpretation is more tragic and touching. Ned does get some peace by understanding that his father was not malicious in his treatment of Cliff but trying to do his best by him. Ned and Kate were emotionally stronger and could handle what happened, but cliff in fact was more emotional, impulsive and the suicide was his own decision.
for the original imdb layout:
http://www.imdb.com/help/show_leaf?redesignolddesign
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