Inside of the head of Martin Scorsese, a Sicilian head bony as a Sicilian fist, sits a movie masterpiece, stillborn. It's called "The Last Temptation of Christ," based on the novel by Nikos Kazantzakis. The script, by Scorsese's longtime collaborator, Paul Schrader (who wrote "Taxi Driver" and "Raging Bull" for him), is written, the budget drawn. Sanctity in a sinner's world, guilt and redemption -- the themes that have dogged him, in art and in life -- groan for expression. And he sits and he watches it, in his head, alone.

It is not being made.

The movie, which had been shepherded by the erstwhile Barry Diller/Michael Eisner/Jeff Katzenberg regime at Paramount, was canceled four weeks before shooting was scheduled to begin.

"In a way, living in Hollywood at the time was like living in a Kafka world," Scorsese says bemusedly. "In the movie of 'The Trial,' they tell the hero, 'I had lunch with the judge the other day, and he's very interested in your case.' And he said, 'Really?' 'I might be able to have a hearing with him in the next three or four weeks. He's very interested in your case.' 'Really? But when does it come up?' 'We don't know. You have to wait.'

"That's the way it was trying to make this film. Katzenberg would tell me, 'Listen, Marty, I just want you to know, Michael Eisner really wants this film made.' And then a week later, Eisner would say, 'Katzenberg is the one who's really behind this picture.' And then I'd hear, 'Barry Diller is really behind you on this point. He wants this picture finished, he wants it done.' And then I'd hear, 'The only friend you have here is Michael Eisner.' Every day, every half-hour, it would change."

It's a scandal: Scorsese, the most consistently innovative American director since Orson Welles, can't make the movie he desperately wants to make. But he's almost ebullient about it, erupting in a rich laugh that builds and breaks -- "ha ha HA HA" -- nailing home paragraphs with those shibboleths of resignation from the old neighborhood: "whaddaya gonna do?" "forgetaboutit."

So whaddaya gonna do, Marty? Well, you go back and make a movie like the NYU days, even though you told Rolling Stone two years ago that you couldn't. You call it "After Hours" and shoot it in nine weeks for around $4 million -- less than the big salaries alone on your last movie, "The King of Comedy." Then you watch it pack the house and you say: ha ha HA HA.

"One of the reasons I made this film on a low budget was, in a way, to challenge other directors to try to break this suicidal tendency of American cinema," says Scorsese. "It's very hard to get the films made that we want to get made, unless we have pretty big stars attached to them. Now, after 'After Hours,' I see that every now and then I can jump off and do one of these. That's why I became refreshed by it. It really renewed my faith in movie making. I like to make movies again, after 'After Hours.' "

Scorsese and Schrader, by the way, both still feel that "Last Temptation" will get made, eventually. For two guys known for the darkness of their imagination, they sure seem like the Sunshine Boys.

Scorsese first journeyed to Hollywood in 1970, a short, black-bearded 27-year-old who might be mistaken, on first meeting, for a three-card-monte dealer, gesturing hands restless as wrens in Tom Cat's yard, four words in the space God made for one. He had already directed one avant-garde feature, "Who's That Knocking at My Door?" and had a reputation as a man with a Moviola -- "the Wizard of Three Screens" -- for the editing job he did on "Woodstock."

He arrived to edit another rock 'n' roll movie, "Medicine Ball Caravan," and quickly fell in with what Paul Schrader calls "a small community of people trying to make it." George Lucas. Steven Spielberg. Francis Ford Coppola. Peter Bogdanovich. Brian De Palma.

Together, they formed the American New Wave. Like their French counterparts, some were critics, all students, avant-gardists whose taste ran to the Hollywood mainstream -- Ford, Hawks, Hitchcock. And mostly, always, endlessly, they were intoxicated with movies, with making them, and making them their way.

The next few years would bring an era of excitement that recalled the days of Mack Sennett and D.W. Griffith, when everything was being done for the first time. Coppola would make "The Godfather"; Lucas, "American Graffiti"; Spielberg, "Sugarland Express"; Bogdanovich, "The Last Picture Show"; Scorsese, "Mean Streets." In the theater next door: Robert Altman's "McCabe and Mrs. Miller" and "Nashville," Bob Rafelson's "Five Easy Pieces," Alan Pakula's "Klute," William Friedkin's "French Connection," Sam Peckinpah's "Straw Dogs."

Those three or four years formed the last Golden Age of American movies, an era mad with vistas, and it did not last. Lucas no longer works as a director, at his own choosing. The debt-ridden Coppola has become a Mr. Fixit assigned to a troubled project called "Peggy Sue Got Married." Altman works only with ridiculously low budgets. Rafelson sits in L.A. wondering morosely whether he'll have to direct a teen sex comedy, just so people don't think he's dead. De Palma just completed "Wise Guys," a comedy he jokes "was rejected by every studio in Hollywood, including the one that's making it." Only Spielberg found success, however dubious; and it took him more than a billion dollars in grosses before he felt he could take a chance with his latest, "The Color Purple."

Many bemoan what's happened, how American movies have become a rueful joke, how the studios, divisions of corporate divisions, might as well be rolling electric can openers off an assembly line. Less remarked upon is the role of the directors in digging their own graves -- or, more precisely, digging their own pools. There was the Orson Welles who was exiled from Hollywood; but there was also the Orson Welles who insisted that his special chair be air-freighted in for his dubbing sessions. Which of these guys will take a salary cut? Will shoot quickly, without Luma cranes and Skycams, will work without big stars?

Scorsese.

"I was watching 'The Big Chill' the other night, and you have all these people playing only the old records, and I said, Why don't they just get up and deal with the present? What's the matter with these people? What are they all complaining about in that film? What's their problem? What is their problem? They don't feel they changed anything in the '60s? Yeah, they changed it, now it's going back the other way. Now whaddaya gonna do -- you bring it back the other way.

"Never give up."

He had grown up with movies. An asthmatic child; his parents would park him at the movie house, where he'd watch John Ford westerns, or in front of the TV, where the great Italian Neo-Realists like De Sica and Rossellini were being broadcast, in subtitled versions, for the Italian community. He still remembers his father pointing at a horse on the screen and saying, "That's 'Trigger' "; still remembers an erotic twinge when he saw Wendy lift her dress in "Peter Pan."

He watched everything, and loved something about everything he saw; emerged with a catholicity of taste that, when he was teaching at New York University in the late '60s, would become his trademark. "It was Godard Godard Godard Godard, all day and all night," remembers Jonathan Kaplan ("Heart Like a Wheel"), a student of Scorsese's then. "Marty came with Ford and Hawks and Hitchcock -- he would try to beat the snobbism out of his students, taking them to theaters on 42nd Street. Or if he couldn't get the films, he would literally act out the movie. Marty doing John Garfield in 'Force of Evil' -- that's a vivid memory." Later he would write a piece for Film Comment listing his "guilty pleasures," among them "Land of the Pharaohs," "House of Wax" and "Guns Don't Argue."

And he grew up on the streets. And he grew up in the church.

Born in Queens, he moved when he was 7 to Elizabeth Street, in the Sicilian section of Little Italy, a world he would preserve in "Who's That Knocking" and his loving documentary about his parents, "Italian-American"; that he would immortalize in "Mean Streets" and "Raging Bull."

It was an insular world -- till he went to NYU, he hadn't seen Greenwich Village, though it was a few blocks away -- and a violent one.

"I grew up a block away from the Bowery. Right around the corner," Scorsese says. "Turn the corner, and go to school in the morning with my little books and bags, and these bums are fighting with broken bottles, putting out each other's eyes, blood flowing in the street. When you're 6 years old, that's gonna make an impression. And then, of course, I come from an Italian household. People are more . . . outgoing. They express their feelings, especially if they're not good feelings. ha ha HA HA. Maybe a dish'll fly every now and then."

Most of Scorsese's films have an element of violence in them, from the domestic violence of "Alice Doesn't Live Here Anymore" to the stylized fight sequences of "Raging Bull" to the extravagant massacre that ends "Taxi Driver." He's been criticized for it, never more so than when John Hinckley Jr. shot President Reagan as a way to pledge his troth to the Jodie Foster of "Taxi Driver."

"It was a nightmare! What can I say?" Scorsese says. "Naturally, I feel very badly about it. But does anybody really think that this movie made this guy do that? Remember the end of 'Fahrenheit 451'? Werner is running around and gets away, and what they do, for the public, they just grab any guy in the street, and they pretend it's him, and they arrest him, so the public can go to sleep. It's the same thing they did with 'Taxi Driver.' 'Oh, it's okay, the movie made him do it, it's just a freak accident.' Because this country needs everything tied up in a bow, and because news is entertainment, they have to have an answer. They have to have an answer."

"Redemption is a pretty bloody affair in the Catholic Church," says Paul Schrader. "The blood on the hands and feet, the gash in the side."

"It's part of life," says Scorsese. "There's nothing to stop a car driven by a guy getting a heart attack or a guy who's drunk; we're sitting in this place, it comes right through those windows, kills 15 people. Or some other guy comes in and shoots 15 people and walks out. It's a fact of life! Absolutely! I don't understand why people say, 'He always thinks around every corner there's violence.' You know why? Because there is.

"Two days before Christmas I was looking out my window, Barbara [Scorsese's wife] and I were eating, and there were all these bodies being taken out from the Chambers Street subway. I said, 'Something must have gone on there.' And it was the Bernhard Goetz thing."

At one point in his life, Scorsese wanted to be a priest; he was, however, expelled from the preparatory seminary. "I was doing good, then I was 13 or 14, I realized there were women, girls, y'know, and I started to get fascinated by that. You simply couldn't concentrate. And the idea of celibacy was very hard."

He grew up with The Madonna and The Whore, with the idea that there were nice girls and bad girls, and three of his early movies explore that theme -- in "Taxi Driver," it's the preadolescent hooker played by Jodie Foster, and the campaign worker played by Cybill Shepherd, who moves through the crowd in an imperially white knit dress and "they . . . cannot . . . touch . . . her."

In most of his films, he's puzzled by women, reverential toward their beauty, respectful of their strength and tormented by sexual guilt -- the elements that give the screwball comedy of "After Hours" its distinctly Scorsesean spin.

"I identify with the character in many ways," he says. "It's the everyday anxieties that a man goes through, especially in dealing with women and dealing with the proximity of sexual encounter. If, let's say, you've been married, and you get a divorce, and you're gonna start seeing women again. You go on a date -- it's hard! It's not easy! You have dinner with them, you talk, and you look and the flirting that goes on, and then, oh my God, what about performance? What about sexual performance? Whaddaya gonna do?

"It's terrifying, it's absolutely terrifying. Maybe someday I can do it from the woman's point of view, but I doubt it. ha ha HA HA. I'm sure they have the same 'What does he think of me, what do I look like.' I'd like to do a film with some women about that, just to get to know a little better, to see what their anxieties are."

But for all his guilt and puzzlement, Scorsese obviously loves women -- you can see it in the way he photographs them, the room he gives them in his stories, the fact that his closest associates (his editor Thelma Schoonmaker and his assistant Debbie Schindler) are women, and, most of all, in his four marriages. For in that paradoxical way we associate with Norman Mailer, only someone who cares deeply about marriage would go through it four times.

"There's nothing I can really say about it. Y'know, just try again," Scorsese says. "I believe in it, I really do. People say, 'Oh, he's not serious.' I'm very serious. Mailer was one of the reasons -- I read about his marriages, and said, 'Should I do it again?' It gives you some sort of hope, that maybe there could be a relationship/companionship that could last."

Never give up.

He has had a marriage (and a painful rupture) with model Isabella Rossellini, daughter of Ingrid Bergman and director Roberto Rossellini; had a celebrated affair with Liza Minnelli. Now he's married to Barbara DeFina: she was the production manager on "The King of Comedy" and will coproduce Scorsese's next movie, "The Color of Money," a sequel to "The Hustler" starring Paul Newman.

"The best I can do is try to have a relationship with somebody, and a companionship," says Scorsese. "I am fascinated by obsessive love, by being so madly in love with somebody, but it's obsessive behavior. It's not really love, it's a perversion of love, and I'm fascinated by that. I'd like to make another film about that, but it's very painful to do that.

"After one of my marriages broke up, an Italian friend of mine said, in a very nice way, he said, 'You happy?' I said, 'Yeah, fine.'

"He said, 'Nobody is completely necessary.'

"Because you're on your own. Whaddaya gonna do? You're on your own."

Although Scorsese got thrown out of the seminary, he never quite gave up on the idea of being a priest. While he was at NYU, he toyed with going back to it, toyed with being a filmmaker and a priest.

Which is, in a way, the key to what he's become.

He's both a realist and a transcendental filmmaker, both our darkest and most hopeful. His flock are the Johnny Boys and Jake LaMottas, the Travis Bickles and Rupert Pupkins, the losers and loners he grew up with, the loser and loner that Scorsese, in some sense, will always remain.

Those human failings that others find miserable he finds warmly comical -- he's been known to guffaw warmly through a screening of "Taxi Driver" -- and that human suffering that others condescend to with routine pity, Scorsese finds deadly serious. On some level, he still sees life as the struggle for men's souls, as a chance at the sacred.

"In a sense he feels he has this unending battle with the Devil," says his old friend Jonathan Taplin.

Says Scorsese: "Love, love your neighbor, love yourself, love your God, and sharing -- I bought the goods, the actual Christian philosophy. To actually practice that, be like St. Francis of Assisi. The precepts of religion are almost lip service. It's lip service. You have to really practice it. I don't think I can. A revolution based on Christian ideals, it's fascinating. But you know, the last guy that tried that got crucified -- ha ha HA HA."

Scorsese had his own time of trial, after "Taxi Driver," when he was the hottest director in Hollywood, with an entourage and a mansion, and it turned his head around.

"The values get kind of messed up," he says. "You find yourself, if you're not invited to a certain party, you actually find yourself saying, 'My God -- what can they be thinking of me? Did they like the last film -- maybe they didn't?' Or if you're not invited to the right screening. Sometimes there's an A and a B screening. There's an elitist screening and then there's a screening for The Industry, and if you're not invited to that one you find yourself having palpitations, and if you are invited you find yourself feeling a little superior. It's a movie! Go and see it! What's the big problem?"

He didn't let it destroy him. Instead, he dug into himself and found a work of art -- "Raging Bull," about a bad man and a bad man's redemption.

Never give up.

"I think it's a matter of faith, and it's a matter of losing faith. I just have a feeling that we know nothing about what we're doing here, so the more intelligent we think we are, the further away we're getting from some sort of reality. If you're talking about a faith that was grilled into me when I was 8 years old by the Roman Catholic Church, yes. But I guess if you talk about it another way, which is the faith in some sort of higher order, or something else beyond this, I don't think I've lost that. I'm just trying to get to that. I don't think I'll ever get there, but I'm trying. The thing that Anne Frank says, that despite everything she still feels that we're basically good? I think so too -- ha ha HA HA. I couldn't believe it, I really think so! In spite of it all. Given the breaks, I think that we still will come out pretty good.

"I'm just fascinated at how bad we are."