House II: The Second Story (1987, Ethan Wiley)
The House series of films is an odd one. The first one is quite an effective little horror-comedy, the third on is an (often heavily cut) hard horror film that was originally nothing to do with the franchise and the fourth is an attempt to recapture the vibe of the first which ends up crashing and burning fairly horribly.
And the second?
Well, the second one is nuts. It's a movie that I simply can't imagine getting greenlit nowadays; an oddball mishmash that is basically a children's movie, yet also features zombies getting their heads blown off. The plot follows Jesse, a 20-something whose parents died when he was a baby. He moves into the family home and promptly decides to dig up his great-great-grandfather's grave, which is probably one of the more left-field act one plot devices that I've come across. This ill-thought-out act of desecration leads to the discovery that said ancestor is not dead... Although he is, given the expected genre of the film, surprisingly friendly and cheerful.
A little bit further along in the flick and you should be braced to meet a caterpuppy (or possibly puppapillar), a baby pterodactyl and an electrician/adventurer played by Cliffy from Cheers. The whole mix starts to play like a missing Muppet movie, and by the time Jesse declares that he has come to consider the caterpuppy et al as being his 'family' the viewer is likely to be questioning their sanity.
That said, it's great. Of course it is. In fact, I enjoyed my recent rewatch even more than I enjoyed it back in the 80s, when I rented it on VHS after the woman in the cinema box office had refused to believe that my group of friends were old enough to see Midnight Run and sent us home heartbroken. Provided the film is approached in the right spirit, it provides quite a lot of warm hearted chuckles.
Just be aware... It's got rather more in common with In The Night Garden than A Nightmare on Elm Street.