“Why is it that certain groundbreaking novels disappear from the radar screen while other lesser works remain in print?”

So puzzled the writer George P Pelecanos, in his introduction to the 2001 republication of Newton Thornburg’s long out-of-print 1976 novel, Cutter and Bone.

Like book, like movie. Initially released under Thornburg’s title, Ivan Passer’s extraordinary 1981 film, adapted for the screen by writer Jeffrey Alan Fiskin, ran straight into a damningly influential bad review from The New York Times’ pace-setting critic Vincent Canby. Still spooked by the financial disaster of Heaven’s Gate, a nervy United Artists washed its hands. A week after opening in New York, Passer’s film was pulled. When a small handful of critics rallied to the defence, UA rereleased it with a new title, Cutter’s Way, and a new ad campaign, pitching it as misunderstood arthouse piece. The result: it took less than $1 million in its first year. In the UK especially, Cutter’s Way became a cult, a rumour, impossible to see: unavailable on video since 1982, it wasn’t released on DVD until 2005.

Canby called it “a peculiarly unfocused murder mystery about some eccentric young Southern Californians who live on booze, drugs and their wits… vivid, without being informative or even amusing.” And that it is. The way The Searchers is a vivid, unamusing movie about a cowboy looking for a girl.

Richard Bone (Jeff Bridges) is a golden boy beginning to tarnish. Something between a gigolo and a bum, he drifts the exclusive enclave of Santa Barbara, listlessly boning rich, bored women, hoping they’ll pay. “Fastest dick on the beach,” his friend, Alex Cutter (John Heard), calls him.

Cutter is a Vietnam veteran. He left half of himself – an eye, an arm, a leg – over there. What’s left runs on alcohol, ravenous intelligence, and bitter, poison sarcasm. Bone crashes at Cutter’s rundown house. Most nights, he’s left alone there with Cutter’s long-suffering wife, Mo (Lisa Eichhorn), a pale, burned-out beauty with the smartest brain and the sharpest eyes of all, drinking straight from the bottle. Bone and Mo talk. They hold each other’s gaze a little too long. They look at each other and wonder.

Out late one fuggy night, Bone sees a figure, a shadow in the rain, stuffing something into a trashcan in an alley. Next morning, the cops haul him in. Turns out this figure was dumping a girl’s mutilated corpse. He barely saw the guy, he says. When he’s released, Cutter and Mo are waiting for him. It’s the town’s parade season. Bone watches local oil tycoon JJ Cord riding past on his horse, untouchable up there in the privileged sunlight.

And suddenly he says: “It’s him.”

As soon as he says it, Bone doubts it. But for Cutter, this is evidence enough: Cord is the killer. Guilty as sin. And Cutter is going to bring him to justice.

Cutter’s Way starts out like a thriller, but it’s unclassifiable. With Heard’s unforgettable Cutter thrusting his raggedy nightmare pirate figure into everyone’s face, it’s about lingering post-Vietnam guilt spasming up from the underbelly. Cutter’s obsessive campaign isn’t simply against the millionaire Cord, but against everything he stands for, the system that sent Cutter to get ruined in a needless war. His senseless quest for justice is something else, too: a way of imposing a plot on his own shattered life, disappearing from reality into imagination.

More than anything, Cutter’s Way is about the relationship, the guilt, tension and love, between Cutter, Bone and Mo: wasted lives, waiting for things to change. Mo waits for Cutter to find the courage to stop drinking and start living again. Bone waits for her to admit it won’t happen. Everyone waits for Bone to make a decision, commit to something.

(More than anything, though, more than anything: the longer you live with it, the more you realise that this film is about Mo. Fiskin’s writing of the character is exceptional, but Eichhorn’s delicate, wry, ruined performance is simply incredible.)

Bridges, lean and tan, is perfect as this apathetic stud. It’s a key role. The Coen Brothers understood: The Big Lebowski, with Bridges dragged into another paranoid Californian conspiracy with another ’Nam obsessive, seems in large part a comic-book homage to Passer’s film. The Dude is a Bone who stopped doing sit-ups.

Bridges abides, but one of the most poignant things about Cutter’s Way is how the rest of its creators seemed to fade with the credits. Heard, who devours the movie whole, steadily drifted down toward playing Dad in Home Alone, although his turn as the fated corrupt cop in The Sopranos reminded everyone what he should have been doing. Passer, a Czech filmmaker who fled the Soviet invasion, never made another American movie in its league. Fiskin’s incredible script went  unrecognised by almost everyone, save the Mystery Writers Of America, who gave him an Edgar award for it.

After giving one of the best performances of the decade, Eichhorn, a pale fire, practically vanished from the movie screen.

Both book and movie share a strange blend of melancholy and paranoia; both use the thriller as cover for a haunting portrait of a doomed, three-way love affair; and, beneath it all, both offer a deeper contemplation of America. But Thornburg had little time for Passer’s movie, which he labelled “absurd.”

The film loses Cutter and Mo’s baby – a crucial motivation for all three central characters in the novel – but the biggest change is the excision of the roadtrip Cutter and Bone make from Santa Barbara to the suspect tycoon’s headquarters deep in Ozark country, which constitutes the final, feverishly, bluntly bleak third of the book.

So where Thornburg’s book follows corruption spread across America, the film stays intensely focused on Santa Barbara, until the locale becomes a bright, guilty character in its own right.

Carried on Jack Nitzsche’s most haunting score – thin, eerily poignant themes played on zither and glass harmonica, the music captures the melancholy sense of something dying in the sweet Southern California air – Cutter’s Way is a movie you want to play over and over again, like a record. A film of regrets, unfulfilled potential, stray details, blurry 3AM conversations. It has its own look – the entire film takes place either in wan afternoon sunlight or thick, muggy night, the white parade horses glimpsed like ghosts – and it keeps its own pace, revolving slowly, lazily around the trio until the very end, when it suddenly shifts gears and gallops straight over the edge.

That ending is changed from Thornburg, yes: but it’s abrupt, bleakly ambiguous and utterly right. A layered mystery, moving to tragedy through  sweet Californian sunlight, it’s the Chinatown of the 1980s, no less. Put it on your radar.