TORONTO—Terry Gilliam is waxing Brazilian again. His new movie, The Imaginarium of Doctor Parnassus (which opens on Friday [December 25]), is set in the type of bizarro universe that exists only in Gilliam movies like Brazil and Time Bandits.

Parnassus literally takes place on the other side of the looking glass, but Alice isn’t his only influence. “It’s a sort of mixture of fairy tales, Shakespeare, and just nonsense and silliness with a bit of [Monty] Python thrown in. It’s a real compendium. Let’s just call it that.”

TV miniseries and theatre icon Christopher Plummer stars as Parnassus, a magician with the power to bring dreams to life. Sort of. Parnassus is betting with the Devil, aka music icon Tom Waits, and that means trouble for someone—in this case Tony (Heath Ledger), the mysterious, apparently suicidal stranger who joins Parnassus’s travelling troupe.

The drama behind the making of Gilliam’s movies is often more bizarre, implausible, and fascinating than what ends up on-screen—and considering that his films are among the most idiosyncratic “mainstream” movies made in English, that’s no easy feat. Gilliam’s surreal cinematic masterpiece Brazil was only seen in America after he ran a full-page ad in Variety asking when it was going to be released. Los Angeles critics arranged secret screenings and gave it best picture, direction, and screenplay awards, spurring the distributor to release it. Gilliam’s attempt to bring The Man Who Killed Don Quixote to the screen was itself turned into a feature film, Lost in La Mancha, about his failure to produce Quixote after a series of on-set disasters, including an injury to his star. And Parnassus took a heartbreaking behind-the-scenes twist when Heath Ledger died just before filming was completed.

But the impish, grinning former Monty Python member/artist/writer/director/producer clearly lives the lyrics to “Always Look on the Bright Side of Life”, because he used cinematic sleight of hand to replace Ledger with three of the world’s hottest actors: Jude Law, Colin Farrell, and Johnny Depp. In an interview in a downtown Toronto hotel room, Gilliam says he considered walking away from the movie after Ledger’s death. “I wasn’t sure if we wanted to continue,” he says. “But I was surrounded by people who said, ”˜No way. Heath Ledger’s last performance is not going to end up on the cutting-room floor of an unfinished film.’ And thank God Heath had great friends who came to the rescue. I was only asking actors who were close friends with Heath to get involved. The thing I’m proudest about is that we actually made a film out of the circumstances. It’s there, and I think it’s wondrous. I like it as just a monument to how beloved Heath was. When you think of how everyone came forward to rescue this thing because of Heath, that’s good.”

Gilliam says the inspiration for Parnassus “comes from life”, which confirms that he lives one seriously strange life. “I was feeling old, and I thought, ”˜Let’s do a compendium, one last happy film before I kick the bucket.’ So basically, I just started with things that I like, things that I was good at, and thought, ”˜Let’s go for it. Something new.’ And it was a strange experience, because [cowriter] Charles McKeown and I didn’t have a story when we started. We had a wagon turning up in London in a theatre, a theatrical wagon. That was the beginning. We didn’t know where it was going to go, and we just kind of let it tell itself as we worked forward.”

Because this is a Gilliam film, the backstage drama started even before Ledger’s death, “because nobody wanted to give us the money,” Gilliam says. “Here is Heath Ledger, who in 2008 is going to be the Joker—he’s going to be the biggest star on the planet, and we’re going to be his next film, and can we get money out of America? No. Isn’t that crazy? That part of the world never changes. Hollywood is as stupid and shortsighted as they’ve always been. More so, actually, now. Much more. So we come back to Canada again, Canada and the U.K. The money came from here and we got going. This is the second film now [shot] in Canada. [The first was Tideland.] I’m really becoming more and more fond of this country.”

Asked if he considers the movie a return to his Brazil-ian roots, Gilliam laughs. “No, it was me trying to stomp some of the things I was exploring earlier and just going for something that was full of life and wonder and magic and all of those things.”