Gaucho was the album that (for a time at least) broke Steely Dan. Recording began in 1978 and over the course of a two year span, the band used at least 42 different musicians, spent over a year in the studio and went way over the original money advance given by the record label. Coming off the highly successful and critically acclaimed album Aja, the recording of Gaucho was plagued by a litany of problems: lawsuits, recording issues, disputes, health issues, and even death.
Even before recording started there was a legal battle between the record labels MCA and Warner Brothers over the rights to release the album with MCA eventually winning. Fagen and Becker relocated from LA to New York City but the Steely Dan recording process of endless takes, and countless hours in the studio clashed with many of the hired studio musicians who become increasingly unhappy with Becker and Fagen as time went by. Dire Straits guitarist Mark Knopfler, who was recruited to play guitar on “Time Out of Mind”, likened the recording experience to “getting in a swimming pool with lead weights tied to your boots.” After assembling an ensemble of studio musicians from the local New York scene, along with Steely Dan favorites such as Michael McDonald and Larry Carlton, recording was underway.
Disaster occurred when an early favorite song , “The Second Arrangement”, was accidentally erased by an assistant engineer. The band attempted to re-record the track, but eventually abandoned the song entirely. Things only got worse. In January of ’80, Walter Becker found his girlfriend, Karen Stanley, dead of a drug overdose in their Manhattan aprtment. To add insult to injury, Stanley’s family then sued Becker for $17.5 million claiming he was the reason for her death on the grounds that he had introduced her to heroin and cocaine. Eventually the two sides had settled out of court for an undisclosed amount, but those around Becker have said he never got over it. Three months later Becker was struck by a taxi cab stepping off a curb. The result was a fractured right leg which had rendered him immobile. For weeks, the only way that Becker could communicate with Fagen and the engineers was through telephone.
To say that Fagen and Becker grew more and more disenchanted with the process would be an understatement and eventually they scrapped much of what had been recorded previously, including several entire songs. This brings us to The Lost Gaucho.
In addition to “The Second Arrangement”, a number of songs were written for the album which were not included in the final release. Some of them were included on a bootleg titled The Lost Gaucho, which features recordings from early in the sessions for the album. These included “Kind Spirit”, “Kulee Baba”, “The Bear” and “Talkin’ About My Home”, as well as “The Second Arrangement”. An early version of “Third World Man”, with alternate lyrics, is included under the title “Were You Blind That Day”. You can hear them in the videos below:
Steely Dan – The Second Arrangement (Restored 2nd demo)
Steely Dan The Bear Lyrics (Re-mastered)
Steely Dan – Talkin’ ‘Bout My Home
Steely Dan – Kulee Baba – Gaucho Outtakes
Steely Dan – Were you blind that day – Gaucho Outtakes
Steely Dan – Kind Spirit – Gaucho Outtakes
Finally, the video below goes into the story of Gaucho and The Lost Gaucho.
The Lost Gaucho (1980)… Steely Dan’s Alternate Album | Not Lost Media –
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