"The Unbelievable Truth" is all rumor and innuendo, a jokey look at distortion and self-delusion set in Long Island by way of "Twin Peaks." A bent comic cogitation on sex, lies and the cost of living, this engaging first feature was shot in 11 1/2 days in director Hal Hartley's back yard for a piddling $200,000. Now Hartley is this year's low-budget Wunderkind, and "Truth" one of its ragged art house pleasures.

Soap star turned teacher Robert Burke (yummy yummy) is the iconic Josh Hutton, an enigmatic loner who was done wrong somehow. The movie opens with Hutton walking on a stretch of deserted Long Island highway, an ex-convict returning home to Lindenhurst amid a flurry of small-town gossip. Dressed all in black and professing celibacy, he is asked by everyone -- including the nihilistic teenager Audry -- if he is a priest. "No, a mechanic," he says. He's got a way about him, soft as the breeze in the local bulrushes.

Adrienne Shelly, a new, improved Rosanna Arquette, portrays the brooding Audry, a classically alienated miss who has taken to wearing black herself as she waits for the coming apocalypse. Having recently rejected a strait-laced steady beau and an invitation to Harvard, Audry finds a new obsession in life when she sets her cap for Josh, now a mechanic at her father's garage. Meanwhile she becomes a successful underwear model, moves to New York and promises her father that she will not see Josh again. And sadly, the rumored mass murderer and the sassy super-model go their separate ways.

None of Lindenhurst's quaint citizens seems to know exactly what led to Josh's conviction, though the tittle-tattle grows progressively more grisly. Pearl (Julia McNeal), a waitress at the local diner, tells Audry that "he seems like a nice man." "Even though he killed your father and your sister?" asks Audry, who is more and more perplexed by this Long Island "Rashomon."

A jumble of subplots and suppositions, "The Unbelievable Truth" ultimately comes together as suburban farce in a door-banging conclusion to all the wild speculation. Hartley's picket-fence palaver owes a debt to both Sartre and Liz Smith. And that's the truth.

The Unbelievable Truth, at the Cineplex Odeon Dupont Circle and Wisconsin Avenue theaters, is rated R for adult subject matter.