But the Lynch/Alejandro Jodorowsky film? With Asia Argento, Marilyn Manson and reportedly "enough sex and violence to guarantee an NC-17 rating"? Fine, Hollywood Reporter, we're listening:

Herzog and his longtime assistant director Herbert Golder co-wrote [My Son, My Son], loosely based on the true story of a San Diego man who acts out a Sophocles play in his mind and kills his mother with a sword. The low-budget feature will flash back and forth from the murder scene to the disturbed man's story. A guerrilla-style digital video shoot on Coronado Island is tentatively set for March. ...

In a separate development, Lynch's Absurda production company has attached Asia Argento and Udo Kier to star with Nick Nolte in Alejandro Jodorowsky's metaphysical gangster movie King Shot. Marilyn Manson is touted to appear as a prophet in the Sin City-style film.

Having essentially gone DIY since his own unwatchable digital epic Inland Empire, Lynch will executive produce both films and handle their sales at Cannes, hitting the Croisette with his cow and selling Herzog impersonations to foreign buyers for $100 apiece. We hear Herzog, meanwhile, had to be forcibly removed from the Kung Fu Panda press conference after pitching a Grizzly Man remake to Jack Black.

• Directors team for 'My Son' [THR]

ThinkFilm is known to owe substantial amounts to media outlets, among others. Sources say the company was going to announce an acquisition from Senator Entertainment this week but then canceled its press meetings. ...

Though the company saw an $18 million worldwide gross from Before the Devil Knows You're Dead, further problems emerged Thursday when ThinkFilm execs suddenly discovered there was no money for Friday newspaper ads for Then She Found Me. The following day, SAG pulled the plug on Nailed, telling members not to work due to the lack of required funds in accounts designated to pay the film's actors.

Yeah, that's a bit of a problem. As we noted Monday, all signs point to David Bergstein, the schmogul whose Capitol Films bought Think in 2006: Nikki Finke has another round of films affected by Capitol's cash drought, and Variety also notes squabbles with filmmaker Alex Gibney, who reportedly "threatened to take ThinkFilm into bankruptcy after the company failed to pay him his fees — including his Oscar bonus" after his Taxi to the Dark Side won this year's Best Documentary award. We've heard similar stories from the aftermaths of indies from Half Nelson to Off the Black to Murderball.

Additionally, around this time last month, we heard ThinkFilm was temporarily banned from holding press screenings at Chicago's Lake Street Screening Room when it fell five months behind on rental fees. (It has more debts in New York, where Think president Mark Urman recently complained to The Hollywood Reporter in an unrelated story,"It costs $700 to $800 to schedule a screening for one critic, and sometimes they don't make it.")

The Capitol deal was supposed to free ThinkFilm to acquire and push films more aggressively in the congested indie marketplace; we've seen hints and flashes, but the inconsistency can't be helping as they hit the market at Cannes. But at least Russell is back to work! A carefully timed, videotaped meltdown between him and Jake Gyllenhaal could be all Bergstein and Co. need to set the ship right.

[Photo Credit: Getty Images]

• Production resumes on 'Nailed' [Variety]

Rumors also are circulating that the state of South Carolina could withdraw its incentive monies because of the financing problems. Filmmakers hope to resolve the cash crunch and re-start shooting next week since principal photography is only at the halfway point. "I am confident we will finish," an insider on the pic just told me. "The financing on this like most indies is based on bank loans and bridge loans. This is a matter of waiting on the bridge loan. Hopefully, it will all be resolved."

But new information coming my way says David Bergstein's Capitol Films behind the pic is troubled. In 2006, he acquired a leading UK-based international sales company which over the years had built a good reputation in the movie biz and made a wide range of commercial and critical successes, including Robert Altman's Gosford Park. But now I'm hearing from NYC film financing circles that "a shitload of people are owed a lot of money," in the words of one expert in the field. "I heard this week that his major financing source, a hedge fund, has shut down and left him in the lurch."

This isn't the first of Bergstein's hedge-fund gambits to capsize at an inopportune time; last year's attempted buyout of Image Entertainment acrimoniously fell through a few months back when its primary funder fell under scrutiny from its investors. That and Nailed's problems may or may not be related, but Bergstein's money woes are also said to be trickling down to his American distribution subsidiary ThinkFilm, which, since the schmogul acquired the company in late 2006, have consistently flirted with having more titles in the pipeline than it can afford to release. (We hear they're in arrears with at least one NYC screening room, but they've also won two documentary Oscars in five years, so judge that progress for yourself.)

Anyway, Finke notes that the cast — including Jake Gyllenhaal, Jessica Biel and Catherine Keener — are standing by, ready to work when shooting resumes, hopefully this week. We've seen flimsier houses of cards survive, but this might be one that's withstood all it can. Let us know if you have an eye on the weak spot.

• SAG Orders Actors On David O. Russell Film To Leave [DHD]

PICTUREHOUSE AND WARNER INDEPENDENT PICTURES TO CEASE OPERATIONS (May 8, 2008 - Burbank, CA) Picturehouse and Warner Independent Pictures will cease operations, it was announced today by Alan Horn, President & COO, Warner Bros.

"With New Line now a key part of Warner Bros., we're able to handle films across the entire spectrum of genres and budgets without overlapping production, marketing and distribution infrastructures," said Horn. "After much painstaking analysis, this was a difficult decision to make, but it reflects the reality of a changing marketplace and our need to prudently run our businesses with increased efficiencies. We're confident that the spirit of independent filmmaking and the opportunity to find and give a voice to new talent will continue to have a presence at Warner Bros."

Bob Berney has served as President, Picturehouse and Polly Cohen as President, Warner Independent Pictures. The management teams from both companies will be meeting in the weeks ahead with executives from the Warner Bros. Pictures Group to determine the status of projects in various stages of development and acquisition, as well as distribution of already-dated films.

"Working with Polly and her team at Warner Independent has been great for me personally and a valuable experience for the company," said Jeff Robinov, President, Warner Bros. Pictures Group. "I'd like to thank everyone at Warner Independent for their passion and dedication to independent films and filmmakers. They were involved with some very important films and helped further the talents and careers of a number of writers and directors, and between Warner Bros. Pictures and New Line, we'll continue to nurture those relationships and produce those types of films."

"Bob is an incredibly talented film executive and made Picturehouse an important player in the world of independent film in a relatively short time," said Horn. "I'm extremely grateful to Bob and the entire team at Picturehouse. Their accomplishments and the films they created speak volumes about their dedication to and understanding of the art of film."

Upcoming Picturehouse films include Mongol (June 6), Kit Kittredge: An American Girl (in limited release June 20; wide release on July 2) and The Women (September 12). Warner Independent's upcoming releases include Towelhead (August 8) and Slumdog Millionaire (in limited release starting November 7).

Another whisper (and our own preference) has Berney starting fresh at a new company underwritten with hedge fund cash. The latter would suit him well with Cannes on the horizon and Warners' decreasing overall interest in the volatile indie marketplace; the studio would gladly get out anytime, but we hear they're willing to move ahead with Berney if he's interested. We doubt it, particularly as a co-president with Cohen; he's been calling his own shots forever (quite well, we should add) and would be too attractive a prospect to new money with fewer strings attached. And Berney could bring along the majority of his staff, who would likely take pink slips under the WIP scenario.

In any case, the Picturehouse calendar doesn't bode well for any kind of longevity. Despite Marion Cotillard's Oscar win for La Vie en Rose, the bitter disappointment that was Run Fat Boy Run casts a longer shadow over what's looking like a pallid 2008. Most notably, Warners is reportedly unhappy with the all-star remake of The Women set for this fall. A source tells us the B-thriller Amusement could go directly to DVD. Additionally, with so much of New Line's infrastructure — much of which supports Picturehouse's distribution efforts — to be stripped by the end of July, the worst-case scenario has Picturehouse closing out with the Abigail Breslin vehicle Kit Kittridge: An American Girl on July 2 and Warners cleaning up the rest from August on.

Did we miss anything? Are you hearing different? You know where to find us either way.