Ishii was a huge fan of author Edogawa Rampo and adapted many of his stories onto film. One such tale is Panorama Island, a mystery with surreal horror elements. This was renamed to Horrors of Malformed Men and became one of the the catalysts for Toei's pinky violence era of cinema.
The story concerns a man named Hirosuke (Teruo Yoshida), who has lost his memory and been wrongly imprisoned in a mental asylum. He escapes and flees to a local circus. He eventually discovers that he has an uncanny resemblance to a recently deceased wealthy man named Genzaburo Komoda, and decides to assume his identity to live out his life in the lap of luxury. Unfortunately, the Komoda family has more than a few skeletons in their closet with some of them being downright deadly.
For the first two-thirds of the film, the events are depicted as straightforward, but in the third act, things take a turn for the bizarre. Hirosuke takes a trip to an island off the coast of the Komoda residence, an island that his "father" Jogoro (Tatsumi Hijikata) has been using to conduct terrible experimentation on humans. At this point of the movie the visuals go into hyper-drive with bright colors, flashy gold-painted nude women, and grotesque abominations cobbled together by Jogoro. The island represents depravity and hedonism on a grand scale with a man who is satisfying all of his basest desires no matter the cost.
There seems to be a recurrent theme in Japanese films post WWII where those who are disfigured or considered "freaks" are depicted as evil people unworthy of respect. One can't help but think of the parallel between this idea of disfigurement equaling evil and the way the burned survivors from Hiroshima and Nagasaki were ostracized after the war--often times becoming scapegoats for the weakness or failure of Japan after they surrendered. Jogoro has a webbed hand that he is sensitive about and this abnormality causes him to become overly obsessed with his beautiful wife. When she cheats on him he goes insane, and begins hurting everyone he can, even those who are innocent.
In a way, this is a morality play and none of the players have clean hands (though their transgressions vary) and tragically nobody escapes unscathed. At its heart Horrors of Malformed Men is a tragic exploration of the secrets that families can bury and the darkness that can lurk just around the corner.