The plot thickens with Bonnie Prince Billy's latest album, Beware

On the Moroccan-tiled patio of L.A.'s Hotel Figueroa, Will Oldham and a half-dozen friends and acquaintances have been drinking for a few hours now. One person's already gone to puke and returned to continue drinking. RTX singer Jennifer Herrema, who's on this trip for "moral support," leans on Oldham's shoulder while he relays a grotesque conversation he had with some fellow travelers as they cruised through the Hollywood Hills the night before.

It was foggy, he recalls, taking a sip of his tequila, and the car's headlights accentuated the mist in front of them. Oldham, who records his lonesome electric folk music these days as an oft-mascara'd character named Bonnie "Prince" Billy, recalls that the conversation started with an abstract, whimsical thought: "Imagine if men ejaculated not with a liquid, but with steam. Like, every time you came, it sprayed out instead of squirting."

He describes how they continued to roll through the misty hills, laughing at their notion, when a new idea occurred to them: The fog was the collected spoo of Hollywood.

Oldham did his time in the Hollywood fog when he was a young man in the late 1980s. But he fled not long after arriving, and so telling stories like this eases the distaste he often feels about inserting himself into the record-industry promotion machine. After wrestling with the rigamarole of album rollouts for 20 years, he's come to hate the requisite interviews and, especially, the photo shoots. But he has a remarkable new album out called Beware, and he still has to pay the bills. This is why, after being cooped up in his hotel suite since morning, he's come to sit beside the empty pool under a crescent moon for one more conversation.

Oldham, whose beard is as dense and tangled as an Appalachian forest and is growing so long that it's starting to Yosemite-Sam in the middle, is in a good mood. He flashes a cheesy, round smile that, coupled with his joyful eyes, has no doubt charmed many a stranger. That charm is likely what landed him the choice role of a teenage preacher in John Sayles' film Matewan, about a union clash between coal companies and miners. At 18, having never set foot in Hollywood, Oldham—who had been attending Brown University after growing up in Louisville—found himself working with actors Chris Cooper, James Earl Jones and David Strathairn in a deadly-serious story set 250 miles east of his birthplace. Oldham looks like he's about 12 in the film, which came out in 1987, but delivers defiant sermons with the vigor of an aged snake handler. His work earned him good notices, so he headed West.

"Matewan was very, very inspirational but very deceptive, as well," Oldham says. "I thought that it represented the professional actor's life, the professional crew's life, and it doesn't at all."

After dealing with L.A. cattle calls, landing a role in "this TV movie about Baby Jessica, who fell down the well in Texas" and realizing that his first filmmaking experience had been the exception to the rule, he made a decision. "I can't be a professional actor," he recalls thinking, "because you can't count on being the exception." Oldham says he felt a profound sense of loss, and returned to Kentucky. "It went to, 'Well, I don't even know. I wish I could just die now.' "

His two brothers, one older, one younger, played music, and Will had close contacts in the budding Louisville post-punk scene, so he gravitated there and started thinking about songwriting. "I realized, 'Oh, I can take all that I've learned from acting and put it in there as well. And what if I try and do it myself? Make these productions, put these groups together. The point was to have quality of life as part of the equation."

He joined up with his friends in a band called Slint, and recorded a 7-inch record under the name Palace Brothers called "The Ohio Riverboat Song." He released it in 1993 on an up-and-coming Chicago record label called Drag City, and a tiny little segment of the world took notice.

I saw Oldham perform for the first time that year, in what, he now tells me, was the band's first show outside Louisville. It was in Columbia, Mo., that the Palace Brothers opened for a reunited Big Star. I had become obsessed with the film Matewan—especially Oldham's Danny Radnor character—and at that show, in a gravel parking lot behind the University of Missouri basketball arena, he looked nearly the same as in the film, manifesting that same preacherlike fervor.

Sixteen years later, Oldham has accumulated a vast body of work through his "productions"—first as the Palace Brothers, then shortened to Palace, then changed to Palace Songs, then to Bonnie Prince Billy—each release another plot line in a gnarled, nonlinear story. He erects these fictions through songs about cinematographers and Russian novelists, about Japanese filmmakers and impending death, burning balls and lust and hate. Though he's far from a household name, in a certain segment of the music world Oldham's work is considered essential listening.