Sometimes it takes a crazy notion to make sense of confusion, and few have proved that better than director Toby Robertson in his brilliantly alive production of "Pericles," which last night opened The Acting Company's two-week stay at the Terrace Theatre.

By setting Shakespeare's unwieldy comedy in the glass cages of an insane asylum, Robertson not only provides a plausible context for the peripatetic saga , but gives himself license to display zaniness from purple punk haircuts, to Groucho glasses, to knights in boxer shorts.

With all due respect, "Pericles" is not one of the Bard's more endearing works. Some scholars believe he didn't even write all of it, but maybe only the third and fourth acts. It is rarely performed, probably because the plot defies description, let alone comprehension. Suffice it to say that this Pericles, Prince of Tyre, starts an era of personal misfortune by guessing that the King of Antioch is having incestuous relations with his daughter.

During the following 14 years he endures attempted assassination, shipwreck, the presumed death of his bride and the presumed death of his daughter, who has nearly been killed by her guardian and almost ravished by a fiendish band of whoremongers. The first half (as divided in this production) is spent setting up the complications, and the second, more somber, is devoted to unraveling them.

Robertson evidently saw this as the Perils of Pericles, and the antics he has devised are enlightening as well as amusing, telling us that we should enjoy the tale and not berate our brains for failing to find great wisdom within. His narrator, the poet Gower, (J. Andrew McGrath) is a nightclub emcee in a tuxedo and patent leather shoes, with a touch of Boris Karloff on his sepulchral face. Men play women and women play men, throwing a coat over the semi-institutional pajamas that everyone except the attendants starts out with, or drawing a pair of female breasts on an otherwise manly chest. Some speeches are sung.

The time may be now, but it is the now of Peter Brook-land, a kind of white space that exists in its own theatrical zone. When Thaisa (Pericles' beloved), holding a microphone, describes the performances of the knights contesting for her favors in the style of a moderator of a fashion show, it seems perfectly appropriate. Or the three fishermen who appear as tumbling clowns in rain hats and end up singing Shakespearean verse with Pericles (Tom Hewitt) in a barbershop quartet--they, too, are not unlikely inhabitants of this strange and wonderful world.

The Acting Company, which has been visiting Washington since its formation 10 years ago, is comprised of recent graduates of the country's leading drama schools--but that should in no way be taken as an indication of immaturity. The company, which spends 47 weeks a year touring, inveigles talented directors like Robertson, who won an Obie award for an earlier production of "Pericles," to redesign the old and new classics in which they specialize.

This "Pericles" displays the imagination that is special to the theater, and lifts, without ignoring the values of verse and storytelling, an old song into a new key.

"PERICLES," by William Shakespeare, directed by Toby Robertson, sets by Franco Colavecchia, costumes by Judith Dolan, lights by Dennis Parichy, music by Carl Davis and Jim Cummings, choreography by Devorah Fong. With J. Andrew McGrath, David Manis, Tom Hewitt, Michael Manuelian, Libby Colahan, John Stehlin, Margaret Reed, Jack Kenny, David O. Harum, Ray Virta, Richard S. Iglewski, Ronna Kress, and Philip Goodwin.

At the Terrace Theater through Sunday.