I think, as Washingmachine said, that the "poo-covered man" as you put it, does represent evil, malice, cruelty, fear, etc.
but i disagree on that blue haired woman in the club. i think they're two diffirent elements of the dream. The woman is, in my opinion her aunt ruth.
Ruth, as Diane said in the engagement party, is dead and left Diane some money.
Thing is that I believe a theory where Diane was sexually abused as child, and Ruth knew all about it but kept it a secret between them with a bribe. The money she left Diane when she died. Club Silencio is Dianes idea of hell, where Ruth is. Then when the lightning and thunder noises start, Diane(Betty in the dream) starts trembling in her chair, those are the abusing memories and secrets being brought forth in the dream.
http://www.imdb.com/title/tt0166924/board/nest/32834852