Summary
Chuck catches up with Teddy, informing him that McPherson and Cawley are now in Ward C, causing the men to flee into the nearby woods. Chuck reveals that he found Laeddis's intake form while investigating patient records, but Teddy tells him that he will look at it later, and heads toward the lighthouse. The men emerge on a cliffside where the lighthouse is in sight, but Chuck once again presses Teddy to return to the facility, now that they have the intake form. Chuck's insistence makes Teddy paranoid, and when he asks Chuck about the weather in Portland, Chuck says he is from Seattle.
Teddy insists on going on to the lighthouse alone, and the men part ways. After Teddy finds that the lighthouse is unreachable due to the high tide, he circles back and finds that Chuck has disappeared. Spotting what looks like Chuck's body on the rocks below, Teddy descends a treacherous cliff and nearly slips while reaching for the intake form blowing in the wind. Down at the water's edge, Teddy follows a trail of escaping rats up into a glowing cave in the rocky cliffside.
Inside the fire-lit cave, Teddy finds a middle-aged woman wielding a knife. He asks her to put down the knife and quickly assumes that she is the "real" Rachel Solando. Rachel explains that she used to work at Ashecliffe as a doctor before being admitted as a patient. Rachel reveals to Teddy that Ashecliffe has been using psychotropic drugs and trans-orbital lobotomy procedures to make patients pliable and obedient, not unlike the brainwashing and mind control experiments used on prisoners of war.
Rachel asks Teddy about his past traumas, which she warns will be invoked to prove his insanity. She asks him whether he has had headaches or strange dreams, which she implies may have been caused not only by Cawley's pills but also by the food and coffee served at Ashecliffe. Rachel tells him that Ashecliffe performs illicit lobotomies at the lighthouse, and that every employee—from the doctors to the orderlies—is involved in a criminal conspiracy.
The next morning, Rachel tells Teddy he must leave, lest she be found too. Although Teddy tells her they will escape together, she disagrees, given that the highly guarded ferry is the only way out. When Teddy asks her about Chuck, she replies, "You have no friends." Dirty and injured, Teddy climbs back up to a main road and is intercepted by a warden driving past. On the ride back to Ashecliffe, the warden tells Teddy that "God loves violence" and that no true moral order really exists. The warden calls Teddy a violent man and claims that they have known each other for centuries.
Back at Ashecliffe's primary facility, Teddy finds Cawley and others at work subduing patients. Cawley tells Teddy that, the night prior, an unknown man attacked a patient in Ward C, and spoke with another named George Noyce. Teddy feigns ignorance and refuses a cigarette when Cawley offers. When Teddy asks about Chuck, Cawley tells Teddy that he came to Ashecliffe alone, and once again stresses the importance of his lengthy but valuable clinical process. When Cawley asks Teddy about Chuck again, Teddy says, "What partner?"
Teddy showers and spies on an orderly, before running into Dr. Naehring in the halls. Teddy says he is headed to the ferry, and pins Naehring to the wall with a syringe to his neck when he sees that the doctor is about to sedate him. Naehring laughs off Teddy's violent gesture, and tells him that the word "trauma," which derives from "wound" in ancient Greek, is also the German word for "dream." Naehring calls Teddy wounded and implies he is a monster, prompting Teddy to plunge the syringe into his arm and flee outside.
Analysis
The mysterious lighthouse is one of the film's key symbols, laden with double-meanings. On the one hand, the lighthouse is a destination for Teddy that represents illumination and the revelatory power of the truth, which Teddy's psychological delusions prevent him from acknowledging. On the other, the lighthouse is the place where Teddy's lobotomy will eventually be carried out, conveying the twilight of his present, thinking mind.
Posing as Chuck, Dr. Sheehan fails to gently lure Teddy back to Ashecliffe by having him read his own intake form. Teddy's paranoia and hallucinations both worsen over the next segment of the film, which sees Teddy strike out on his own and dream that a second, cave-dwelling Rachel Solando exists. Teddy's exchange with the second Rachel Solando confirms all of Teddy's prior delusions, given that he is in effect talking to himself. This 'second' Rachel's last words to Teddy—"You have no friends"—are emblematic of clinical paranoia, in which one imagines the entire world to be conspiring against them.
Scorsese visually renders Teddy's slow descent into madness by having the character undergo gradual wardrobe changes. Although Teddy starts the film superficially resembling a U.S. Marshals agent—complete with a badge, sidearm, and partner—by the time he leaves the cave he looks dirty and injured in white garb, resembling a deranged Ashecliffe escapee. The conversation between Teddy and the warden, in which the warden argues that no true moral order exists, reflects not only the moral ambiguity of Teddy's core character, but also the kind of philosophical despair that the atrocities of World War II often induced in its survivors.
Cawley's speech to Teddy upon returning to Ashecliffe is one of the most notable and revealing moments in the film. Throughout, Cawley has been "directing" the performance that Ashecliffe's physicians and patients are obligated to carry out, sometimes unwillingly, which Scorsese emphasizes here with cutaway shots of Mrs. Kearns looking disturbed by Teddy's presence. Cawley's monologue—in which he expresses commitment to a "valuable" method that rewards patience, and contempt for those merely seeking a "quick fix"—resembles the kind of speech a frustrated director might deliver to a studio head or cinema-goer, suggesting that Shutter Island's narrative can also work as an allegory for (among other things) the work of filmmaking itself.
Teddy's encounter with Naehring in the hallway once again raises the question as to whether Teddy is fundamentally a violent man. Naehring discusses the etymology of the word "trauma" in order to stir Teddy into realizing his dream-like hallucinations are the result of traumatic events, and his accusation that Teddy is a "monster" anticipates a question that will surface again in the final lines of the film, in which Teddy poses a moral question about whether it is better to live as a monster or die as a good man.
