Flight of the Conchords star Jemaine Clement has been set to play the villainous Yaz in Men in Black III, the sequel that is being fast-tracked by Columbia Pictures. Will Smith stars with Tommy Lee Jones and Josh Brolin, and Barry Sonnenfeld directs.

Clement will next be seen starring with Steve Carell in Dinner For Schmucks, the Jay Roach-directed DreamWorks comedy that Paramount distributes July 23. While HBO didn't renew their series, Flight of the Conchords partners Clement and Bret McKenzie have been touring around the world and have sold out most venues.

Hollywood veterans don't remember anything like it happening on a major movie before: In November, Sony Pictures started filming Men in Black III with only one act of the script set. The studio built in a break in production that was scheduled to last from late December through mid-February, during which the remainder of the screenplay was supposed to be completed.

Now the hiatus has been extended until March 28, and a new writer, David Koepp, who did uncredited work on the first MIB, has been brought on board to work out complex script issues involving time travel. Although the delay is costing millions, Sony says those expenses will be more than offset because the studio started shooting in late 2010 -- in time to save millions thanks to New York state tax breaks.

But the decision to start filming a complicated, effects-driven tentpole without a finished script has some in Hollywood baffled. The top executive at one production company expressed skepticism that "the tax break is covering the chaos cost," adding, "There isn't any tax break that would convince me to do [what Sony did] -- ever!"

MIB III, scheduled to open in 3D in May 2012, has a budget that will easily pass $200 million. In the story, Will Smith's character returns to 1969 and encounters famous figures of the day, like Yoko Ono, as well as a younger version of Tommy Lee Jones' Agent K (played by Josh Brolin). Smith would have to travel quite far into the past just to see the previous edition of MIB in theaters: The sequel was released in 2002 and, despite a drubbing from critics, grossed more than $440 million worldwide.

With studios chasing franchises, it's hardly surprising that Sony was determined to pursue another MIB. Sony spokesman Steve Elzer says the studio came up with the unusual shooting plan because it feared the New York incentive program would expire at the end of December. (Instead, it was extended for five years.) The studio also has said it included the hiatus to allow outdoor scenes to be shot in New York in spring weather.

But several observers suspect the studio moved ahead with production largely because all of the key players -- including Smith, Jones and director Barry Sonnenfeld -- were finally ready to go, and a delay might have jeopardized that.

Smith and the others agreed to reunite based on a script from Tropic Thunder writer Etan Cohen. But though that version found favor with the studio, Sonnenfeld and producer Walter Parkes, Smith wanted changes. "He's become very enamored with aspects of screenwriting," says a source involved with the production. The source believes Smith has earned the right to weigh in on the script, but he says the actor's process "takes a long time." (The star's reps did not respond to a request for comment.)

MIB III was supposed to start filming in October but was delayed until November, reportedly because of disagreements over the script. Even as filming began, Sony brought in screenwriter Jeff Nathanson (Catch Me If You Can) to make revisions. With the first act in the can, production shut down as scheduled around Christmas, but there still was no script acceptable to all parties. The problem hadn't been resolved when the hiatus ran its course in mid-February.

One former studio chief is not surprised that Sony did not come up with a script that passed muster with Smith in the time allotted. "If he wasn't satisfied after it's been years in development, how are you going to fix that at Christmas?" this person asks. And though the prolonged pause in production is costing Sony millions, Smith is under no pressure to approve a script that is not 100% to his liking.

A key player on the film explains that the nature of the project has made it difficult to get the screenplay right. "Any movie involving time travel seems to be difficult if you want to make it work and have no bullshit loopholes, which has taken longer than we thought it would," he says.

But shooting that first act without the remainder of the script in place has only compounded the issues. "It's hard because you're locked into the beginning of the movie," a production source acknowledges. "It creates problems that are just kind of crazy."

According to a source with firsthand knowledge of the situation, Sony expected to save more than $35 million thanks to the New York tax program. But that will be reduced because the hiatus has gone on longer than anticipated. Sony maintains that the extra costs are not substantial. "Because we extended the hiatus from the holidays, few people were on the payroll, so this was a relatively inexpensive decision that has had an insignificant impact on the budget," Elzer told THR in an e-mail.

Elzer says Koepp has already delivered a revision of the script. But by now, the stresses of making the film have stirred old antagonisms -- notably between Sonnenfeld and Parkes. While Sonnenfeld is known as talented but high-strung, Parkes -- noted for a handsome head of gray hair -- often is criticized for heavy-handedness with writers. (Both Parkes and Sonnenfeld declined comment.)

The two men clashed so bitterly on both of the earlier MIBs that at one time, a knowledgeable source says, there were plans to make the third film without the active participation of one or the other. The men made up as MIB III came together, but now they are said to be at odds again, and a source friendly with Sonnenfeld insists the director is not at fault. "A lot of the blame gets put on Barry because he's so neurotic and out there," this person says. "But the real evil here is Walter trying to impose his point of view on things. And because he's so facile and he's got great hair, he wins the day a lot. But what sounds great never materializes into a screenplay."

That point of view is not new. Lawrence Lasker, once a filmmaking partner with Parkes, said a few years ago that Parkes had "a bit of a Salieri syndrome," referring to the composer who was famously jealous of Mozart's genius. Screenwriter Dale Launer (My Cousin Vinny) says Parkes is prone to throwing out many ideas in a process that "sort of cuts your balls off a little as a creative person. He gets to do the fun stuff, and you're supposed to make his ideas work."

The clash between producer and writer appears to have recurred with Koepp. A knowledgeable source says the scribe signed to the latest rewrite with the understanding that he would not be required to meet with or speak to Parkes. Elzer says it was the studio and producers who chose to have Sonnenfeld work directly with Koepp, adding, "This is fairly common."

But it's clear that when it comes to MIB, Parkes derives power from more than just good hair and a persuasive manner. Back when the first MIB (1997) was coming together, he kicked off a mutually beneficial relationship with Steven Spielberg by installing him as a producer on the film, even though Parkes and wife Laurie MacDonald had set up and partially cast the picture at Sony.

When it grossed about $590 million worldwide, Spielberg raked in a profit participation that was rumored to be $100 million. For Spielberg, who has been an executive producer on every film in the series, that proved a gift that has kept on giving.