@Ulthar: Yes, a Manos remake should be made, maybe made with old, old film or shot on video, with better actors and a more fleshed-out script. They should also give the crew the same budget as the original one had (Inflation adjusted), to see if they could utilize it better, and to make sure nothing looks too "Hollywood".
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@Master: You could make your cuts smoother by overlaying non-dialogue bits on some of the more awkwardly-cut dialogue bits (some of the stuff in Torgo's intro, for example, could be overlayed with Michael and Margaret looking at him), or overlay it with stuff where the sound could be muted.
You could also make the cuts to the dialogue more precise, it sometimes seems like it cuts off before the end of a sentence. That may very well be an error on the original filmmakers' part, but if that's the case you should still try to work around less important, mebbe worse-acted spots.
The ending could be better edited, I know the original car sequence went on forever and had irritating dialogue, but it looks abrupt in your re-edit. Maybe you can find some more grainy old music and mute the old jabbering? A 3rd part should be made so you can have a better time limit.
Apologies if it sounds like I'm taking this way too seriously, but I am a wannabe filmmaker myself. Plus, when I hear of a fellow Manos-appreciater, I get enthusiastic!