I think you've got a nice idea on things there. I know I've ignored the possibility of another Walter - just never crossed my mind. But, a similar thought crossed it when Peter talked about his mother in last night's episode. I started to see Peter as the alternate dimension one and realized that the mother he knows could very well be Mother2 (lets use your 1 and 2 to separate people). Why I never even considered his memory of Walter as being Walter2 is beyond me, but it makes a lot of sense.
This would explain Walter's facial expressions every time Peter says something negative about his past with his father. Walter is probably remembering how violent Walter2 was and cringes at the thought of his "son" having to live with such a man.
Also, I'm pretty sure that Walter has talked about childhood memories that Peter has had trouble recalling - likely because Walter is really referring to Peter1 who is dead.
So, Walter2 is angry and wants his son back. All of this could just be revenge.
Though, I'm sure there's much more because it wouldn't explain wanting to kill Dunham. There's a lot more with the testing and William Bell that hasn't been uncovered. I also think there's still a story in Peter's amazing intelligence - I doubt it was naturally conceived.

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