How Incomplete dominance can be explained at molecular level?
Molecular mechanisms of incomplete dominance (a.k.a. partial- or semi-dominance) vary.  As an example, let's look at snapdragons and morning glories, two flowering plants that both exhibit incomplete dominance relative to flower pigmentation.
Snapdragons (Antirrhinum majus) have multiple alleles at the nivea locus.  The wild-type nivea transcript (niv+) encodes a chalcone synthase involved in pigment biosynthesis, and a single copy of the niv+ allele is sufficient for wild-type pigmentation.  However, niv+ is semi-dominant with the mutant niv-525 allele, leading to reduced pigmentation in the heterozygote.  The original publication by Coen and Carpenter 1 describing this effect offers some possible molecular explanations:

Transcription factor sequestration.  The niv-525 allele could encode a defective enzyme.  This allele also contains an inverted duplication of a transcription factor binding domain required for enzyme expression.  The defective niv-525 allele therefore titrates away transcription factor from niv+, leading to less enzyme and therefore less pigment.

Transvection.  There is some physical interaction between alleles on homologous chromosomes, such that transcription of one or both alleles is activated or repressed in trans.  This could be realized as binding of the enhancer associated with the wild-type allele to the promoter of the defective allele.  Figure 9 of Gohl et al. 2 has a good explanatory graphic.

Anti-sense hybridization.  The inverted duplication on the niv-525 allele contains a TATA box.  Transcription initiated at this site would result in a transcript anti-sense to the wild-type mRNA.  Hybridization of the sense and anti-sense
RNAs creates dsRNA that is selectively degraded and/or inefficiently transported out of the nucleus, ultimately leading to less enzyme product.


Morning glories (Ipomoea purpurea) show similar genetics at the A locus, which also encodes a chalcone synthase.  However, unlike the snapdragon niv+ allele, a single copy of the wild-type a allele is not sufficient to produce wild-type pigmentation.  Therefore, incomplete dominance in morning glory results from a simple dosage-dependent mechanism, as described in Johzuka-Hisatomi et al. 3
Citations

Coen ES, Carpenter R. A semi-dominant allele, niv-525, acts in trans to inhibit expression of its wild-type homologue in Antirrhinum majus. EMBO J. 1988;7(4):877-883.
Gohl D, Müller M, Pirrotta V, Affolter M, Schedl P. Enhancer blocking and transvection at the Drosophila apterous locus. Genetics. 2008;178(1):127-143.
Johzuka-Hisatomi Y, Noguchi H, Iida S. The molecular basis of incomplete dominance at the A locus of CHS-D in the common morning glory, Ipomoea purpurea. J Plant Res. 2011;124(2):299-304.