https://textualvariations.substack.com/p/lynch-dune-4hourcut

Finally, there is 1997 interview with Raffaella de Laurentiis by Faisal A. Qureshi, which corroborates the idea that Lynch was busy at the time the broadcast version was in production but specifically attributes his decision to not participate to a lack of financial compensation on the part of Universal/MCA.

RDL: Universal asked David and myself to work on a “long” version of Dune to be prepared for television. They wanted 3 hours so it could be shown over two nights on TV. (2 hours per night with commercials) At the time David was busy and was not prepared to go back to work on Dune with out further compensation. He and Universal could not reach a financial arrangement so Universal went ahead without him and David’s name is not on the long version. I don’t think Frank Herbert lived to see that long version. DDLC was not involved as they had sold the TV rights to Universal.

I worked closely with Universal to help them with the long version and I thought the final version was pretty good. I always wanted David involved, but unfortunately it never worked out with him. I think a re-release could be possible only with David’s involvement, and I don’t see that happening.*

Among other things, Lynch discusses his new approach to make the movies he wants to make by keeping the budget low, while also reflecting on what happened with Dune.

“I’ve got to hand it to Dino, he didn’t blame me for the failure of ‘Dune.’ When I finished ‘Dune’ I thought it was what I wanted. Now I think it should have been four hours instead of two and a quarter. I shortened it because hardly any very long films have ever made money. But by shortening it we took out the moods of the different planets and wound up over-explaining the unexplainable. When the video version comes out, maybe we’ll make it four hours.”” (180)

Source: Bart Mills, “Director Lynch hung up on warp and weave of life,“in The Sacramento Bee (Sacramento, California), 21 Sep 1986, p. 180.

[The article then states that Ronnie Rocket, his next project, was to be shot in the Spring of 1987 in England.]

““Dune’s reputation is getting better as time goes by,” Lynch claims. “A lot of people saw it on video and came around to a better feeling for it. Dune didn’t help me, but it didn’t hurt me either.

“It still should have been four hours long. In fact, we’re thinking of releasing a four-hour version for video.””

Source: Morley Walker, “Dr. Demento Strikes Again!” in The Winnipeg Sun, 17 Oct 1986, p. 27.

Author Mike Cidoni points out that

“economics decide whether or not a film is restored for video. Before its theatrical release, almost an hour of David Lynch’s Dune (1984) landed on Universal’s cutting room floor, but wasn’t added to the video.”*

*Cidoni’s comments here can be interpreted to mean that either an earlier incomplete 3-hour cut of Dune existed at the level of post-production or that Lynch had attempted to restore an hour of footage for video but was rebuffed. Notably, 3 hours was the runtime Lynch preferred for theatrical release. However, Lynch’s own comments in the interviews cited here indicate he wanted a 4-4.5 hour runtime for the director’s cut on video.

Fitzgerald, the article points out, had restored a number of Universal titles for home video release, including Spartacus (1960), Scarface (1932), and Frankenstein (1931). However, he apparently did not see the benefit of restoring Dune for video, as this would’ve necessitated finalizing the deleted footage’s post-production elements:

““The additional Dune footage is there, but it had to be scored and conformed. Sound effects, mixing and dubbing were needed. Basically, the only thing that was done was the shoot. If it had been economically feasible, I’d have loved to put it out…””

Source: Mike Cidoni, “Video brings new look to old films,” in Argus Leader (Sioux Falls, South Dakota), 27 Feb 1987, p. 12