From what I've heard, the reason Season 2 of Twin Peaks was decidedly un-"Lynchian", was because he was filming Wild At Heart at the time and unable to give major input to the writers. He did return toward the end of the season and brought the show back on track for the most part, but unfortunately it had lost a large portion of its viewing audience by then and it was cancelled before Lynch could properly revitalize it.

He was also planning to make more movies based on the series (originally talking about making a trilogy of films) but Fire Walk With Me barely made any money at the box office so these plans were scrapped.

Over the years, there's been the occasional rumor about Lynch or one of the series' ex-cast members having plans to reboot the series, or bring it back to life in some other format. Personally, I would love to see this happen! Imagine what could happen if they get the right people involved.