Hal Hartley's Fay Grim and Luke Wilson's The Wendell Baker Story (co-directed with brother Andrew) make a prime pair of shaggy dogs. Each of these character-driven comedies is named after its lovably "innocent" protagonist and both are nostalgic for the Hollywood New Wave of the '70s, susceptible to unearned drollery, and prone to hit-or-miss wackiness. Where Fay Grim's arch one-liners seem intended to raise a quizzical eyebrow, Wendell Baker goes for the goofy, slack-jawed guffaw. What's truly disarming, however, is that as fond as they are of their own quirks, and as inured as they seem to conventional narrative rhythms, neither of these movies could even have fallen off the Hollywood assembly line.

Hard to remember, but back in the early 1990s, Hartley was regarded as the hot, young avant Amerindie, and following critically acclaimed festival hits like Trust (1990) and Simple Men (1992), 1997's Henry Fool, a seriously frivolous allegory on art, fame, fate, and the power of the Internet, was hailed as his breakthrough. "The affectless precision of Hal Hartley's previous work is absolutely no preparation for the brilliance and deep resonance of his Henry Fool. Here is a great American film," Janet Maslin proclaimed in The New York Times, complete with comparison to Nashville.

Such effusive over-praise must have cast a negative spell. Hartley's career promptly stumbled, and as Henry Fool's belated sequel, Fay Grim seems nearly an act of desperation. Three of the principals return—the Queens sanitation man turned poet Simon Grim (professionally affectless James Urbaniak), his sister Fay (Parker Posey), and, briefly, the saturnine mystery tramp who changed their life, Henry Fool (Thomas Jay Ryan). A decade has passed, and Fay fears that her 14-year-old son will grow up to be like his vanished and extravagantly disreputable father, Henry—or is that Hartley's hope for the movie?

Actually, Fay Grim is the Parker Posey show. Her chiseled nose and down-turned mouth a priori edgy, Posey cuts a naturally cartoonish figure and, as demonstrated most recently by her broad turn as Lex Luthor's moll in Superman Returns (something of a shaggy-dog blockbuster), she can play physical comedy. As an actress, her allegiance belongs less to her character than her look, but she's so distinctive a presence that she has the effect here of naturalizing the normally ungainly Jeff Goldblum, who appears, with unexpected gravitas, as a duplicitous spook.

The CIA comes to Queens. Not lacking for ambition, Fay Grim adds a topical, national-security subtext to Henry Fool's more romantic concerns for the power of art and the mystery of artistic creation: The MacGuffin is a series of confessional notebooks that Henry may have written in a code that, although seemingly inspired by the French primitive surrealist Raymond Roussel, amounts to a secret, highly damning history of the Reagan Era. The stakes have been raised: Where literature rocked individual worlds in Henry Fool, here it bids to rock the World.

Sometimes, in cryptography, the truth hides in plain sight: Fay Grim's two-word title perfectly evokes the two poles of the filmmaker's whimsical yet leaden sensibility. The initial mode is fey. Transposed from Woodside to Paris in search of the notebooks, Posey looks smashing in a fitted town-coat ensemble so swanky that Hartley feels obliged to write an explanation for how she got it. (An ingenue no more, Posey channels her inner fashion model.) Intrigue swirls around her slit skirts, some of it in the form of Elina Löwensohn—another underappreciated, eccentric performer, here dressed in vintage Madonna cast-offs. For perhaps 40 minutes, Fay Grim actually sort of works as a comic thriller, albeit more amusing than funny. All manner of agents are in pursuit of Henry's notebooks. "The Russians extorted them from the North Koreans," one tells Fay. Hartley underscores and undercuts this conspiratorial nonsense with a bit of background tooting. (The film's music, as usual, is his own.) Then things change.

With all manner of backstories and flashbacks jamming the road, the Posey-mobile starts to swerve and sputter and finally blows a tire (in Istanbul no less). For all the tonal shifts, Hartley's style—a matter of tense line readings, emphatically tilted compositions, and select running gags—remains grimly determined. But it's precisely when Fay Grim strains for the big narrative revelation that it seems least con- sequential. Would that Hartley let shaggy dogs lie.

This gloriously deadbeat, self- described "venture capitalist" lives a version of the Austin life, chewing on a cheroot as he sells fake IDs out of a trailer parked on the banks of the Rio Grande—boasting Salma Hayek as a satisfied former customer. The epitome of lovable loser-ness, Wendell emerges happy and cheerful after a stretch in stir (where, in an uncharacteristically frantic montage, he's shown uniting the prison's warring gangs). Paroled to a menial job at a retirement hotel, he improves the quality of life at this dubious institution just by opening a window. (Let the sun shine in!)

The establishment is under the control of the nefarious Nurse King (brother Owen, reveling in the role of Luke's evil twin) who understands that Wendell—"just a pure idiot, eminently frame-able"—will make a useful foil in his underhanded schemes. The Wendell Baker Story thus turns into a version of One Flew Over the Cuckoo's Nest, with the Wilson brothers squeezing maximum humor out of mistreatment of the resident oldsters—notably '70s icons Seymour Cassel and Harry Dean Stanton, who give the movie a welcome zetz. Not so the eternally righteous Kris Kristofferson, who embodies a petrified counterculture fantasy as the institution's in-house stone mystic. The tone is so Watergate that Will Ferrell's energetic unbilled turn as Wendell's romantic nemesis seems positively futuristic.

Low-key to comatose, Wendell Baker might have been improved were it shot in 16mm black and white. There's no shortage of shenanigans, although it all depends on how funny you find the spectacle of Dean wearing a "One Nation Under a Groove" T-shirt as Seymour hits on a teenage liquor store clerk, or the exasperation with which Owen accuses one of the geezers of "urinizing all over yourself." Empty-headed clichés abound, the least feeble of which is Wendell's proud assertion that "Mexico is what the U.S. could have been." Substitute Wendell Baker for Mexico and Holly- wood for the U.S. and you've got the self-important credo of this amiable time-waster.