Lynch was hardly involved during the show's second season. He had direct involvement in four of the twenty-two episodes, by his own admission he rarely attended production meetings. Mark Frost was the one who held it all together (and at present he's still involved), Lynch was off making Wild At Heart. The much praised finale was written before Lynch's return (admittedly he reworked the red room scenes).
I'd rather Lynch be in the director's chair, but Mark Frost is more than capable and Showtime have the Lynch/Frost scripts to work from. There is still a lot to work with, I won't be giving up on it...yet.
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