Sesame Street/WMG

The real appearence of the Big Bird
http://pristichampsus.deviantart.com/gallery/?q=big+bird#/d2elvxd

Although, to be fair it was kinda of obvious.

Mr. Hooper faked his death.
Mr. Hooper's death is very mysterious. We never have been told why or how he died, so it's possible that he really found owning the store too stressful, especially with Big Bird always mispronouncing his name. So he could have ran away to pursue a new career. However, he never thought that Big Bird, being a big friend of his, would react to this, so he made the other adults make an excuse -- he's dead -- and explain it to Big Bird. Yes, one of the greatest moments is Sesame Street history was all arranged by Mr. Hooper to get Big Bird off his back.

I have two words for the original poster: You Bastard

The Count's obsession with counting things was begun by the other Muppets
He's a vampire, right? And yet he never attempts to bite anyone. He could terrorize the entire street with his powers, but just stays in his castle counting things. Wonder why? Look up any collection of vampire legends, and you'll discover that a traditional way to protect yourself from them was to scatter seeds around their coffin. Vampires apparently have OCD and will be unable to resist counting them all. By the time they finish it will be daybreak and they will have to return to their coffins. So someone (my money's on Kermit, he's the only one with his head in the game.) on Sesame Street realized they had a dangerous nosferatu in their midst, and performed this trick night after night to keep him at bay. After months or years of never being able to go on the hunt because of the seeds, he finally cracked and started to simply count everything. And the grinning jocular Count we know and love was born! In fact, maybe the seeds in question were sesame seeds. They named the locale after them, and now he feels compelled to count everything on the street.
 * Or similarly, he's a Discworld style "black ribboner" who uses a compulsion to count as a substitute for drinking blood.
 * Another possibility is that the Count belongs to the same race of vampires as Mitchell in Being Human. For these vampires, blood is more of a craving than a necessity: like Mitchell, the Count is currently on the wagon, and counts to take his mind off his cravings. Also, Mitchell can come out during the day (without sparkling) which the Count does regularly.
 * I always thought he was just a Malkavian.

Gordon is not a name, but an inherited title.
When one Gordon dies or is "Vanished" there is always another that will rise up to take his place. This is to give the impression that Gordon is immortal.
 * Or a Time Lord.
 * The original Gordon has been retired since the 70s and is living like a king in Patagonia.
 * Good night Elmo, sleep well, I'll most likely kill you in the morning.
 * You guys rule. Also, for the eight people who don't get the joke: there you go.

Snuffleupagus is a dream creature who eventually materialized.
I'm really dating myself with this one, but originally, only Big Bird ever saw Snuffy. He'd wander off whenever Big Bird wanted to introduce him, leading people to believe that this was just Big Bird's imaginary friend that he took too seriously. How in the world can a giant furry elephant "sneak away" without anyone seeing him? Well, he was Big Bird's imaginary friend, but he eventually was given enough of Big Bird's belief to manifest a physical body.
 * So Big Bird is Haruhi?
 * Sesame Street s (or operates on the same belief->deity system) as Discworld.
 * Or Fosters Home for Imaginary Friends
 * Or Homestar Runner
 * Or he's a Tulpa

Oscar's can is a TARDIS
Pretty much self-explanatory. It can fit Oscar, Slimey, and an Elephant. There's also a pool, bowling alley, and piano in there. Oscar himself is some species who discovered the TARDIS after the previous owner used up his regens.

S.A.M. the Robot is a Dalek.
Unfortunately, he's... special.

The pickup truck that Cookie Monster ate back in '75 was Kermit's.
He had, for whatever reason, left it in the CTW parking area rather than at home or in airport long-term parking when going to the UK to do The Muppet Show. When they were bouncing around the concept in a script meeting, Cookie said, "Hey, I know who truck we use! It look delicious!" ""Me do craaaazy stuff in '70s and '80s!""

- Cookie Monster on The Colbert Report

Sesame Street was supposed to have entirely different messages, mostly about tolerance for others or not having unacceptable behavior, but more recent executives have caused that plan to backfire.
Oscar is homeless, the Count has OCD, Big Bird is mentally retarded and hallucinated Snuffleupagus as the result of a separate disorder, Bert is a furry (feather furry?) and intolerant of others, Ernie has ADD, Elmo talk to strangers (A lot), and "C" was for "Cocaine". Grover is supposed to be the one viewers associate themselves with, since he learns most of the lessons that Big Bird doesn't. Now, Oscar has a magical land inside his trash can, the Count turned into a sillier character than he should be for his affliction, Big Bird is a young bird of a really large species, Bert is just mildly interested in pigeons and a kindly character in some media, Ernie is a perfectly normal kid, if a bit imaginative, Elmo doesn't talk to anyone but his goldfish and other kids, and "Cookies are a Sometimes Food". Grover's also a just another kid character since they changed Big Bird and dropped Ernie's ADD.
 * 'Furry' is not equal to 'bestality'. Much like 'gay' is not equal to 'pedophile'.
 * Who said it was?

Cookies are a metaphor for crack cocaine
In extension to the WMG above, I'd like to proposition that the C the Cookie Monster sings about really is for Cocaine. Evidence: The Cookie Monster has googly eyes, he tries to eat things if he can't get any more cookies (i.e. trying to snort things that won't actually get him high) and when eats cookies he does it so quickly it looks like he's snorted them. He is also clearly addicted.

Elmo is a pedophile with a similar disease to Konata and her mom.
He's been the same height for at least twenty years, acts crazy and has a strangely decorated house with a bunch of kids and a goldfish in, and there is no way that he hasn't been buying LSD from Oscar since they started the "rainbow portal in Oscar's trash can" specials. Yes, those are poison oak epileptic trees lining the sidewalks of Sesame Street.
 * It's not poison oak, it's Elmo.

Elmo is Pee-Wee Herman in disguise
Think about it: Elmo didn't become popular until after Pee-Wee's fall from grace; they both have similar mannerisms (like arm-waving and laughing at the end of sentences); and Elmo's world looks an awful lot like the Playhouse.

Count Von Count is Sho Minamimoto's father.
One, two, three! Three factoring hectopascals! Ah, ah, ah!

The street is near a portal to Hell
But all of the demons are friendly, or at least happy to have escaped from hell.

The Count is not a vampire.
He's actually just an insane math teacher who believes he is a vampire, or at least enjoys pretending to be.
 * Somewhat confirmed seeing as he is able to walk around in broad daylight without catching fire or sparkling.
 * See Our Vampires Are Different; Sunlight was not originally lethal to vampires, that's a 20th-century movie retcon.
 * A Crossover/Crack Fanfic this Troper recently discovered explains it by his medaillon which protects him due to some ritual (it's only glossed over).

Some of the muppets are half-breeds
Bert, Ernie, Prarie Dawn, etc. are half-monster and half-human, which is why they are small and colorful, fuzzy (not furry), but generally humanoid.
 * I came here to post this exact theory but an alternate came to me which is that...

The Not-monster muppets, the monster muppets, and the humans are all related.
Not in a family sense, but in a genetic sense. Basically, my theory is that the non-monster muppets, and the monster muppets are both evolutionary off-shoots of humanity. At some point, the strain that would become the non-monster puppets stopped, while the strain that would become the monster muppets kept going. And of course normal humans are still themselves.

The Count is purple because of his sunblock.
He uses the purple kind for kids to make sure he doesn't miss anywhere, and uses enough of it that he can't rub it in enough that it turns clear.

Elmo is an Eldritch Abomination
His "world" is drawn in crayon, and even though it is comprehensible, you lose your sanity by looking at it. The creep can see his fish's thoughts, I think that says it all.

Sesame Street is in (or located near) Bluffington
All the puppet humans have odd skin colors (purple, blue, green). Need I say more?

Gonnigan has prime Crowning Moment of Awesome potential.
Think about it. He's the shy one of the Power Trio without as much self confidence as the others, yet he's shown us he's just as capible. He clearly cares for his friends and vice versa. Therefore, there will one day come a crisis that will leave Abby and Blögg incapible of solving it, so Gonnigan will have to solve it himself. And although he'll doubt himself at first, his desire to help his friends will influence him into saving the day... epically. Of course, he'll modestly brush off his display of awesome.

The monsters are the Jaegermonsters who didn't 'take'
Jaegermonsters are specially-created human-based constructs designed to be extremely colorful killing machines with interesting and unique speech patterns, created by a baseline human drinking the Jaegerdraught. We know many, possibly even most, who take the Jaegerdraught, don't transition successfully and become Jaegers, and that everyone reacts differently. The Monsters of Sesame Street are actually the most embarrassing of the failures--instead of becoming beserker super soldiers, you get, well...Elmo.
 * In Elmo's case, you could argue that he is actually a kind of stealth WSD (Weapon of Self-Destruction), because his extreme annoying cuteness induces all but the strongest/stupidest of his targets to commit suicide. He was designed not to have this effect on kids to prevent collateral damage of killing innocents.

Big Bird is the last living moa bird.

 * The supposedly extinct Moa got to be twelve feet tall! As we all know, Big Bird hasn't even grown up yet. Poor kid, Last of His Kind, no wonder he has to be raised collectively by everyone on the street. It would take a village to raise a moa bird. It would explain why his best friend is a wooly mammoth, too.
 * One problem: The moa was a dark brown color, unlike the bright yellow Big Bird. And now for my theory...
 * I'm sure feather-color mutations cropped up on occasion. Or it could just be the fact that he's a juvenile.
 * I'd be more worried about the fact that he has arms, rather than lacking forelimbs altogether.

Big Bird is a juvenile Roc.

 * This mythological bird lived in the Middle East, ate elephants like hawks eat mice and is sometimes said to have a beak full of knife-like teeth. When Big Bird grows up, he will develop the ability of flight and destroy the street and its inhabitants, starting with his old friend Snuffleupagus.
 * So... Big Bird is of Middle Eastern descent? Perfect for an episode or two about racial sensitivity towards Arabs, Iranians, etc!
 * Sorry, but here's a new theory for y'all...

Big Bird is some sort of therizinosaur.

 * Think about it: they're both feathered, stand taller than an adult human, have tubby bellies and don't eat meat. Only problem is that Big Bird is lacking large claws, but that can be easily handwaved by saying he's not full grown yet.
 * Didn't they have teeth?
 * Yes, but they were small and in life they were probably hidden anyway.

Animal from The Muppet Show Tonight and Cookie Monster are related.

 * It actually makes more sense the more you think about it. They're both Extreme Omnivores and Cookie Monster is technically younger than Animal.

Sesame Street is a government-run experimental communist orphanage.

 * Consider: There are very few adult humans on the street. There are always a large rotating group of children around. Conversations automatically lean towards education, and this is not considered normal by others: see A Muppet Family Christmas. Anyone can simply walk into Mr. Hooper's Store and ask for anything they need. Everyone gets their toasters repaired - clearly an effort to meet their budget. The primary living quarters that we see is owned by two children (Bert and Ernie). Most of the monsters in the show are also very young, and follow the instructions of the adults on the street. All of which indicates that it's a new kind of orphanage-one where everyone pitches in and helps everyone else, and kindness trumps all.

There is trouble on Planet TR.
Obviously, the only grain that will grow is TRiticale. This TRoper's guess is that some TRekkies come by sooner or later, and have TRibbles with them.