You can take Troma to the Kennedy Center, but you can't take the cannibalistic grandmothers out of Troma. The New York-based studio, which has spawned such ghastly, oozy movies as "Rabid Grannies," "Surf Nazis Must Die," "Bloodsucking Freaks" and a trilogy about the Toxic Avenger, "the first super-hero from New Jersey," is to be honored with a retrospective from Thursday to Aug. 30 at the American Film Institute. The event is billed as "Aroma du Troma -- The Sweet Smell of Excess: 16 Years of Tromatic Movies."

Founded by Yale classmates Lloyd Kaufman and Michael Herz a decade and three-fifths ago, Troma boasts almost 100 "assets" in its library, a third of which the Troma twosome wrote, directed and produced. The rest were acquired from others for distribution by Troma (among them are two early Kevin Costner titles, "Sizzle Beach, U.S.A." and "Shadows Run Black"). Troma budgets were stuck in the $200,000 to $300,000 range for years, and now weigh in at $500,000 to $5 million. A typical theatrical run is one or two weeks.

Kaufman, who speaks for the company in interviews, is healthily self-effacing about the schlockiness of his life's work: "We're the only studio that can say that in 16 years we've never had a hit. Maybe that's why the AFI is interested in us."

Some critics join in the fun. The Hollywood Reporter called "Troma's War," about tourists who crash-land on a desert isle and promptly start getting killed, "the best war movie ever made with the assistance of the Long Island State Park and Recreation Commission." Newsday called "The Toxic Avenger Part III: The Last Temptation of Toxie" a "tongue-in-hideously-deformed-cheek" movie that "could end up a cult favorite -- if there's a cult that favors a self-righteous hero with a distorted, puffy head who likes to eviscerate his enemies."

Many others, however, savage Troma's "oeuvre de slime" as unnecessarily gross and -- most hurtful to Kaufman -- unfunny. "Comedy has always ridden the back of the bus," he complains. "Buster Keaton died penniless and the critics ignored him. It was only 25, 30 years ago that he was rediscovered as a genius. The critics want to see their names on full-page ads, so they line up to give good reviews to big-budget movies. We don't take full-page ads, so we're a good opportunity for them to show their arrogance and beat us up."

He also blames the Motion Picture Association of America for being tougher with independents than with the majors. "The first 'Toxic Avenger' was very severely disemboweled to try to get an R rating," he says. (By "disemboweled" he means over-edited, but there probably were some literal disembowelments too.) And "Troma's War" should have been "our masterpiece. It was our answer to Rambo, Reaganomics, to the new interest in war. We based the violence in the movie on 'Die Hard' and 'RoboCop.' Michael didn't think there would be one cut from MPAA. But the end result was the movie was totally disemboweled, totally disemboweled, to the point where bullet hits were removed, men on fire were removed, Siamese twins were removed. In order to get an R rating, the movie was rendered unwatchable."

Hollywood drivel is worse than Troma drivel, Kaufman charges. He blasts "Pretty Woman" as an acclaimed big-budget film that glamorizes prostitution and perhaps, by extension in the popular imagination, drug use and AIDS. "That to me is nefarious. My 9-year-old kid saw it on an airplane. Yes, it doesn't have people getting their heads blown off, and it doesn't have Siamese twins joined at the head being cut in half with samurai swords. But our stuff is amateur hour compared with some of the stuff Hollywood is putting out. 'Footloose' was PG, but the kid is smoking throughout the movie."

Until film historians of the future reassess Kaufman and Herz as geniuses, they'll have to take their lumps for targeting an audience below the lowest common denominator. Staffers tell of an editing technique called the Troma Hammer: One of the bosses views a nearly final cut, decides the humor is too esoteric and orders more dialogue to be recorded. The new sound is dubbed in as voice-over or offscreen dialogue, redundantly describing what's happening in the scene, hammering any subtlety out of it. Thus, in "Sgt. Kabukiman, N.Y.P.D.," which will have its world premiere at the AFI, when a clown jumps onto the windshield of a car, someone in the car says, "There's a clown on the windshield."

As bad as Troma's movies are -- one editor calls them "dog {expletive} with sprocket holes" -- it would probably be hard to outlaw them, even in Florida. Each contains at least a little artistic merit. They are morality plays teaching the most basic ethical lessons: Sex is good. Pollution is bad. Sex with a beautiful blind buxom bimbo is very good. Leveraged buyouts are very bad. Mass murder is -- well, depends on the circumstances.

The idea for "Squeeze Play," a romp about a women's softball team, "came from the women's liberation movement," says Kaufman. "You don't have to turn on public television and sit there bored with a two-hour documentary about 'I am woman' -- you can have a little fun with it. We are trying to make films that are uplifting. All our films take the position that the little guy and gal are good."

Similarly, "Class of Nuke 'Em High" is about "a crooked business elite conspiring to build nuclear power plants that were going to fall apart and fry the people living around them." When it was screened at Cannes in 1986, Kaufman felt toxically avenged. "That very week the entire nation of France couldn't eat lettuce because of Chernobyl. You couldn't eat rabbit. Kids were being kept off the beach. We were not so far off."

If "Troma's War" is the closest Troma has come to a classic, then the Toxic Avenger titles add up to the closest it has come to a hit. The Toxic Ring is the story of Melvin Junko, who, as a teenager in Tromaville, N.J., fell into some toxic waste, developed superhuman strength and decided to use his powers to do good. A fourth installment is planned, and the ink is dry on deals to produce Toxie action figures and a cartoon. Marvel Comics maven Stan Lee, an old friend of Kaufman's, wants to do a comic book.

Listening to someone describe a Troma film is like listening to a New Yorker walking around muttering to himself. Rick Gianasi, the star of "Sgt. Kabukiman, N.Y.P.D.," says the movie is about "a clumsy New York City cop who by accident receives these supernatural Japanese Kabuki powers and becomes a crime fighting super-hero." (Right. Just take my money and leave me alone, please.)

But it's true. A recent visit to Troma's headquarters, a tenement full of unreturned soda bottles and half-dead editing machines next to a vacant bodega and above the Nearly New Shop in Hell's Kitchen, found sound editor Peter Novak on the Moviola, dubbing a horrific moan into a scene that matched Gianasi's description. Explained Novak, an Austrian, in his Schwarzeneggian accent: "This is the old Kabuki actor who is dead, or who is about to be dead, and here is Harry Griswold, who, through a kiss, receives these powers."

Could Troma (Latin, say Kaufman and Herz, for "excellence in celluloid") get respectable? The AFI's interest is partly based on that hope. Ken Wlaschin, AFI's director of national exhibitions, helped put on a Troma tribute when he worked at the National Film Theater in London. Then he brought "Def By Temptation," the story of a vivacious, voracious vampiress directed by James Bond III and starring known actors such as Kadeem Hardison and Bill Nunn, to the Los Angeles Film Festival in April. "It turned out to be a real nice film, probably the highest quality film Troma has made," he says.

But Kaufman is the first to admit that Troma doesn't deserve the credit: "The reason 'Def' got good reviews is that Michael and I had nothing to do with making it." Still, after 16 years, their own productions are bound to improve at least a bit. Gianasi says he read for "Kabukiman" because "this didn't seem like any of the movies they'd done before. I don't think I'd want to be a Surf Nazi."

Wlaschin also likes Troma for the same reason the Wall Street Journal and "Adam Smith's Money World" have profiled the company: sheer stick-to-itiveness. "I always admired the fact that they could continue to exist," says Wlaschin. "The stock market crash wiped out about half of the American independents."

Troma is a devoutly nonunion shop. When Ron Fazio was hired to play the Toxic Avenger, some of his friends said, " 'I would never work for them, they don't pay, they demoralize and exploit people just because they want to make money.' But they tell you right up front, 'It's not a lot of money but you'll get in a movie, and you'll be in that movie forever.' " Besides, aspiring actors and filmmakers are begging to be demoralized and exploited as production assistants. "When it is announced Troma is making a movie, we get thousands of re'sume's," says Kaufman.

Like Toxie, Fazio grew up in New Jersey. He attended the University of Maryland at College Park on a football scholarship, then spent three years as a tight end with the Dallas Cowboys and Philadelphia Eagles. Now he keeps 230-pound body and soul together by working as "a glorified bouncer" at Stringfellow's, a chichi Manhattan nightclub, and is glad just to be eating -- literally. While on location (Garden State apologists will be glad to know that Tromaville, N.J., was played by Peekskill, N.Y.), Fazio was thrilled that Troma sprang for a caterer. "They had coffee, cereal, bagels and muffins, all kinds of goodies you would want for breakfast. No eggs, nothing hot like that, but always something you would want to eat."

Even if Troma is crawling out of obscurity, the actors it recruits -- that is, the actors it can afford to pay -- are far from stardom. Says Gianasi, "It tends to bother me a little bit when people say, 'You're in a movie? Who's in it?' and I say, 'No, no, you don't understand. I'm in it.' " Toxie may be able to cut down dozens of corrupt Apocalypse Inc. executives, but he doesn't cut Fazio much mustard at auditions. "I wear a mask in the film, so they don't see my face. And they really can't see my talents because there's no deep acting in the film. It's not what the soap opera people want to see. Just because you were the lead monster in a movie doesn't mean you're going to become a big star." Ominously, Fazio says he has no idea what has happened to whoever played Toxie in the first installment.

What with Earth Day and actual debates in actual New Jersey towns about banning plastic-foam cups, Toxie could become the super-hero of the '90s. Fazio recalls meeting fellow practitioner Dick Durock at the Video Software Dealers Association convention in Las Vegas last year. "I was dressed up as the Toxic Avenger and he was dressed up as the Swamp Thing. It was like we were on the same team -- super-heros who are ugly and fighting against pollution."

Fazio would like Toxie to become an Environmental Protection Agency spokesman. By happenstance, Part IV will be subtitled "Mr. Toxie Goes to Washington," and the Troma team will take advantage of the AFI event to shoot a few hastily penned Beltway scenes.

Might the camera catch Toxie buttonholing influential Washington types, threatening to bash them unless they put a stop to the Love Canals, Bhopals and Tromavilles created by American industry? "I'd like that," says Fazio. "Toxie meets the president. Or even Mr. Quayle. Or anybody, really."