Here’s the original caption from the Cinefantastique magazine:
“David Lynch makes up Laurel Near as the Lady in the Radiator. A large, outdoor set was set of the stage, on which she does her song and dance, was built on the grounds of the AFI center. Lynch hand-stenciled and painted the tiles on the stage floor himself. By this time, ERASERHEAD was entering its third year of production.” (retrieved from DavidLynch.de)
In Lynch’s film the Lady in the Radiator sings a song titled “In Heaven”. This song was written by Peter Ivers in 1976 at David Lynch’s request specifically for his film. It was later covered by a number of bands.
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