So, called upon to supervise Touch of Evil's re-editing in 1998 according to a rediscovered, intricate Welles memo, Murch was astonished at what he saw in its final, sweaty scenes. Welles's Quinlan, a bloated monster, stomps towards his betrayer, a wired-up stooge. And, keeping silent pace with a cumbersome tape-recorder is a Mexican cop, Vargas (Charlton Heston), trying to keep his quarry's words in range, to catch his confession. It's the echo of Quinlan's words, rebounding across the air, that leads to tragedy. The resonance for Murch was equally shocking. The innovations and themes on which he'd built his career were unspooling, four decades old.
"The whole theme of recording, and the fact that everything comes undone because of an echo, is the basis of The Conversation," he recalls, holed up in his studio. "Then there's the technique of `worldising', which I thought I'd invented at school. American Graffiti is a whole symphony on the idea, using source music almost exclusively, and then using that to locate you in space, emotional as well as physical, as the music's edges are diffused and its focus is manipulated. Popular music suffuses Touch of Evil in just the same way. And when I got to see Welles's memo, on page 46, in big capital letters, I found he describes my technique exactly. When I saw it all those years ago in film school, something must have lodged."
Murch's re-edit of Touch of Evil, putting into place the changes Welles begged Universal to make, has already been acclaimed, not least by the film's surviving stars, Charlton Heston and Janet Leigh. The three-minute- 20-second opening tracking shot, an item of reverence ever since it was made, is among the shifts made in the re-edit - stripped of credits and score, the sounds of a bustling Mexican border crossing are restored. But really, Touch of Evil's essence - its atmosphere of spiritual and physical uncleanness - is unchanged.
There's something in every frame of the film that the studio couldn't touch. "It's not The Magnificent Ambersons," Murch agrees, "we didn't find a last reel in the incinerator. We've simply made the film more itself. One of the wonderful things about the memo, though, is that such a strong sense of Welles comes through. It made me feel he was in the room with me."
Was it as if Welles's memo was his ghost - that his presence in it was so powerful, it brought him back to life? "Yeah. Very much."
It's a noir conceit worthy of any of Welles's shadowy, haunted work - the dead hand of a wronged man guiding the living. As Murch went about his work, other ghosts of old Hollywood creaked back to life. Universal's 1958 head of post-production, thought to be dead by the studio, was found alive, at 89, caught on the telephone in his Florida twilight on his way to a round of golf. He took a cardboard box of mementoes from his attic, and left it on his porch. Welles's handwritten, imploring notes on the film sat there in the Florida heat, waiting to be followed at last.
"Touch of Evil was supposed to announce his return," Murch sighs. "In fact, this is the end of what began so brilliantly with Citizen Kane. Welles was only 42. But there was a mark upon this film that caused him to leave Hollywood, and Hollywood to leave him."
Murch's own story is hardly less vital to Hollywood history - and, by strange twists, no less thwarted by it. He studied in Paris in 1963, at the height of the Nouvelle Vague, an enthusiasm he unknowingly shared with the generation he'd belong to, back in the States - the "movie brats", such as Coppola and, especially, Lucas, whom he called his "blood brother". They all began with an antipathy to Hollywood that went deeper than Welles's. The forgotten aspect of that generation of film-makers is that they were against not just the studios, but the world; counter-culture dreamers - hippies, rebels.
"We left Los Angeles because there was no place for us there," Murch recalls, as if speaking of himself and his contemporaries as pioneers beginning a trek. "There was a general feeling, hard to recall now, in the mid-to-late Sixties that the Hollywood version of cinema would simply shrivel up, turn to dust and blow away. So we got out, and went to San Francisco, and started American Zoetrope. It was to be a film collective, that would take enterprising film students from all over the world. The idea was that we would go on the road, with portable equipment, and make 16mm, low-budget films. We hoped they would be seen by a certain audience, who would take what they saw, and make an impact on the culture."
In this period Murch did his most obviously brilliant work, on Coppola's The Conversation (1974). It was the film in which he defined the double job he has done since, as sound designer and editor. It was the film, too, in which the surveillance expert Harry Caul (Gene Hackman) becomes crazed by examining taped sound - that strange, delayed echo from Touch of Evil, and an uncomfortably close fit to Murch's own work. He'd watch Caul pushing buttons, moving tape, just as he was doing with film. When Caul pressed "stop", sometimes he would wonder how the film could still move.
But such unfettered visions couldn't last. Hollywood regained its ground; and, unlike the case of Welles, who was brought low by failure, it was the freakish success of Murch's friends that washed away all they'd gained. "We were not prepared for the success of American Graffiti, or The Godfather, or Star Wars," he sighs. "If you look at what happened to George, his oft-stated `What I'm going to do next is small, experimental films'... well, he's never done that. Because he never took into consideration the effect something like Star Wars would have on him, and on the culture as a whole. There was a chill that we all felt by the early Eighties, running through the system."
It froze Murch as he reached for his biggest prize - directing. He spent the early Eighties preparing Return to Oz, a dark sequel to the Judy Garland classic. But it was buried, and he hasn't directed anything since. He stands before me a success, Welles's mirror image. But Hollywood gouged a price from Murch, just as it did from Welles.
"They did at least leave Return to Oz as I wanted it," he says. "I don't look at it as Welles did Touch of Evil. But I've never been able to get a directing job since. I do feel thwarted. But I'm unsuited to cooling my heels, and I'm lucky I can do other things. I love to edit, I get lost in the process, and I'm careful who I work with. I think films are an interior architecture for the artist, and for society. I have a responsibility to do good ones." And so he turns back to his tapes.