Director Adrian Lyne explains the timeline in a commentary
In a commentary by Adrian Lyne, which you can listen to here, there are two sections which I recently remember listening to which I think pretty much confirm that it was his intention that the events after Vietnam are in Jacob's imagination.
In the very beginning, around the 1:14 point, Lyne ...
My interpretation has always* been that the entire movie takes place inside his head while he's on the operating table dying and is telling the story of his own coming to terms with his imminent demise and journey to the afterlife.
Given this, I believe that the presence of explosions in the main story represent the real world around him 'leaking in' to his ...
It's been a long time since I saw it, but as I recall, Danny Aiello was kind of a guardian angel. Several times he pulled Tim Robbins out of a tough spot and "realigned" him (got him back on the correct spiritual path). The "realignments" hurt Tim, but Tim needed it.
TV Tropes officially lists it as "Your Other Left", indicating it's a running gag. I don't see how it could be taken any other way, as there's never been any indication previously in any work that spirits were prone to forgetting the difference.