In the end, Lynn states that "there's nothing there" shortly before dying. Could this be a reference to both of them being affected by the Morphogenic Engine, causing hallucinations (thereby indirectly meaning that there was never a baby or pregnancy)? I believe this is a very interesting theory to consider.
The morphogenic engine could make women pregnant so the quote "There's nothing there" could mean that it is just a biological process. But of course it could mean the baby is non existant and the signals from the towers are making Blake hallucinate. When Blake pulled the baby out of Lynn their was no need to cut the umbilical cord. Again, the morphogenic engine could have made her pregnant. I have a theory that the reason the engine does this is to create a host for the walrider. These hosts probably don't work since they haven't seen "horror" but I could be wrong and the baby might have been the baby. Knoth thought that the baby was the anticrist coming to scourge the earth which might be an interpretation of the walrider. Father Martin (The first wacko religious guy) thought the walrider was a revelation and freedom; he could have been right. Maybe I'm overthinking this and the baby is actually not real and Lynn meant it more literally. Just theories though.