I think this song is also saying that nobody is exempt from the destruction that can take place in the world ('even the stars are ill at ease'), no matter what our own perception/interpretation of the reality that is fed to us by the media may be. And 'so take warning', because if we don't look beyond the materialistic ideals, we will end up just the same.

The song is about the fires that ravaged Southern California in the summer of 2003, and the media's coverage of it. It was one of the worst fire seasons on record. "So many lives on the breeze'' is telling of the countless number of lives that were at the mercy of the unrelenting Santa Ana winds which fan the fires every summer.

This is basically a reinforcement or spin off of their earlier tune "Only Entertainment". It is talking about how the media exploits natural disasters as their "news" which, in turn, is only entertainment ("showtime for dry climes").

Not a full interpretation, but just a bibliographic note: this song, especially after watching the videoclip, seems inspired, or at least related, to french philosopher Jean Baudrillard's book "The perfect crime".
That book could be resumed in BR's sentence: The media Mecca is trying to peddle reality. They have, effectively and efficiently, killed "reality" as such. Not that it existed anyway some skeptic may think, but now we are farther than ever from it.

I'm sure there'll be a lot more to this song than what I'm gonna explain here, but this is what I think of it:
It's about the media and the way it "peddles reality", which is literally said in the lyrics.
I'll highlight some sentences:

"Somewhere high in the desert near a curtain of a blue St. Anne's skirts are billowing, But down here in the city of lime lights
The fans of Santa Anna are withering": I'm not really sure about this one, but I think it's about misplacing priorities. The media often focuses on a specific subject and by doing so, it forces an opinion up on the public (and prevents awareness about other things).

"You can't deny the living is easy, when you never looked behind the scenery": this is about awareness. It's easy to just buy everything they're selling, and it'll be an easy life doing so, but when you try to find out what's really going on (gain awareness) you'll find that there are a lot of things wrong with the world (a well known happiness/awareness theme from books like "Brave new world" and "1984").

"When the hills of Los Angeles are burning": I think that this means: when LA (the media mecca) is "on fire", ie. it's doing what it does best: peddling reality. Note the reference to older BR songs: "more a question than a curse, how could hell be any worse?" This isn't the only reference to the past on this album (Social Suicide... anyone?).

Last year's fires literally inspired it, but the song takes on new meaning because America gets its identity from Hollywood. That L.A. was burning is a metaphor for the fact that our national identity is in crisis, and we don't really know which way we want to turn. It's also a metaphor for the fact that we have a superficiality of American society, which is based on consumption.