Talk about going out with a bang, huh?
As predicted by Tod's painting "The Burning of Los Angeles," Hollywood erupts into a riot. Some people think it was started when an overeager fan claimed to have a spotted a movie star. Others think it was when "a pervert attacked a child," which is presumably a misinterpretation of Homer's attack on Adore Loomis (27.61), though there's also the little girl Tod finds being molested, so who knows. Either way, it's a nasty scene.
This riot represents "the people who come to California to die" finally releasing their repressed feelings of disappointment. As seemingly normal middle-class Americans tear Tinseltown to pieces, Tod is helplessly swept along. It's not surprise: all we've seen of him so far, really, is a general feeling of aimlessness in life. Although it's painful, he at least scores some A+ inspiration for "The Burning of Los Angeles"—though it's not clear if he's ever actually going to paint the thing.
As for the final moment, when Tod gleefully imitates a siren in the back of a cop car, your guess is as good as ours. Is this Tod realizing that he's part of the problem, too? Is it an illustration of his feelings of helplessness? Or is it something else entirely? As with all things in The Day of the Locust, Nathanael West has left plenty of room for interpretation.