Kage and Jables actually won the Rock-Off.Satan violating the Demon Code by not realizing he'd been beaten weakened him enough for the banishment to work. I mean, that was verifiable Awesome Music.
The song 'Beelzeboss' is actually what The D sing about in the song 'Tribute' with a bit of musical license added to it.When trying to remember the song in the post credits sequence, KG describes it as 'The Greatest Song in the World'.
- That was the general implication. They also said they couldn't remember the song.
'Tribute' was actually about a revenge attempt by Satan, who sent a weaker, less rocking demon to fight them.Because several things about the song contradict the movie. The demon didn't appear in front of them to challenge them, they summoned him, and he reluctantly accepted their challenge because of the demon code. He also was not impressed by their song, but instead declared it lame. Since Satan can no longer appear in the human world, he had to send one of his minions to do his bidding. Being less rocking, he was stunned by the songs that they played.
Satan was never challenged to a rock-off before.During his part in the rock-off, he sings that there's never been a rock-off that he's ever lost. But if that was because he always won, his reaction when being challenged would've been contained and even smug. Instead, he got mad and cussed because he never took part in any rock-off before, and that's the only reason why he never lost.
- Or it's terribly inconvenient. It's safe to say this sort of thing probably would happen a lot.
The Hobo Stranger is Papardello, the Vatican Librarian.As the Guitar Center Guy explains to JB and KG, he befriended a Librarian from the Vatican who revealed to him the secret of the Pick. It is reasonable to assume that he had followed the history of the pick and saw himself as its rightful owner and guardian. Once the papacy discovered the betrayal of Papardello, the Librarian, he was sent to reclaim the Pick once and for all and thus protect the power of the devil from reaching the hands of mortals. He tried to acquire it, but lost his leg. Now he patrols the grounds of the museum in search of young adventurers who wish to win over the power of the Pick.
Dio's verse in Kickapoo was actually Satan reaching out to JB.As shown by the open mic night host actually being Satan in disguise, Satan can still influence our world despite being incomplete. With this in mind, looking back on Dio's verse in Kickapoo, it's possible this was Satan's doing as well. Satan knew JB was the kind of rocker who could one day find the Pick of Destiny, and so he sent him out on his quest to find KG, find the Pick, and win the open mic night.
- Alternatively if you believe that Tenacious D actually won the Rock-Off, it really was Dio encouraging JB to follow his dreams, because he knew that The D would have what it takes to defeat Satan in a musical battle.
Everything before Jables arriving in hollywood is in-universe fictional backstoryThat he was writing down to kill time during the bus ride. In reality his family were only annoyed by his tastes and choices; not actually repulsed by it. He exaggerated it for comedic effect; just like the movie itself does for the real band.
- Jossed by later in the film, when Kage sets up a practice heckling for JB, he breaks down and starts seeing his fathers head saying stuff with the same attitude as the opening.
Tenacious D are actually really good in universe
- We only see them sing very few times infront of people, once at open mic, infront of what seems to be a very apathetic crowd, not the best place to go for judgement on your music, and infront of the Devil himself who is very biased against them because he will be sent back to Hell if he loses, but during Classico, people start to crowd around some more once JB gets in on it (not alot but hey, they are busking) and when Kage goes to that party and starts up playing the crowd seems into the song until its revealed that Kage only knows his backing vocals, so perhaps it's more that they always end up playing for the wrong crowd rather than them actually sucking, it's just that the quest for the POD and their single minded obsession to win the open mic at that bar actually stood in their way, rather than trying to find a decent venue to play at.