Smaller isn’t always better, it turns out.

Of course it often is with stage musicals, especially those that don’t quite work in a Broadway-size auditorium. A dozen years ago, Signature Theatre rekindled Stephen Sondheim’s awkward Passion with the downsized approach: Staged in the company’s old 120-seat house, framed so intimately that it seemed at moments to be lighted entirely by the candles at its ailing antiheroine’s bedside, it remains one of the most throat-closingly beautiful things I’ve ever seen on a stage.

More recently, Studio solved some knotty likability issues with a chamber-sized take on Caroline, or Change—Tony Kushner’s and Jeanine Tesori’s musical about race, class, and rage in ’60s Louisiana. It was wrenching, raw, wonderfully human—and in several critical respects superior to the Broadway version.

However: Comes now Grey Gardens, that problematic New York sensation of two years back, mounted by the Studio crew in the same space that helped Caroline explain herself to her detractors. And while you’d like to think that an up-close look at Grey Gardens might help make sense of a show whose two acts famously get along about as well as its squabbling, eccentric mother-and-daughter central characters, the results are less eye-opening than, well, eye-watering.

Based on the cult-favorite Maysles brothers documentary about two socialites (Jackie O’s relatives, even!) rotting away in a vermin-plagued, plumbing-challenged East Hampton manse, Grey Gardens is as rococo in its better stretches as it is sappily sentimental in its lesser, as conventional and predictable in its first half as it is challenging and adventurous in its second. The true-story tragedy of Act 2 is a haunting, moving thing. Act 1, which still feels like an overlong preface despite the creators’ efforts to lay some explanatory psychological groundwork there—marital discord! engagement-party scandal! drunk sissy pianists!—plays more like a standard-issue drawing-room farce shorn of the usual upbeat, unravel-the-misunderstandings curtain scene.

With those imbalances, and in a space the size of Studio’s 200-seat Metheny Theatre, an entire evening with Edith Ewing Bouvier Beale (aka the quirky bohemian heiress Big Edie) and her permanently apron-strung namesake (the downright demented Little Edie) is a bit like a dinner à trois with, say, the merely operatic mid-career Norma Desmond and her full-on batshit twilight-years self: stimulating, and even a bit tragic, but perhaps a little too much for anyone but a real devotee.

What’s still remarkable: The tortured brilliance of Act 2, with its touchingly sensitive portrait of the fiftysomething Little Edie. (She’s played here by a winning Barbara Walsh, bravely taking on a part for which Christine Ebersole earned the most unhinged critical hosannas in New York; in the show’s famous structural trick, Big Edie is played in her salad days by Walsh in the first half, then in her dotage by Barbara Broughton in Act 2.)

Unable to cope on her own any more, unable to bear being stuck as a dependent in her mother’s home, Act 2’s Little Edie is a hamstrung fighter captured toward the end of a long, slow surrender, a once-promising life destroyed as much by the chances she took as by the ones she didn’t. Not for nothing does Little Edie recite, twice, Robert Frost’s famous lines about the two roads and the yellow wood; not for nothing does she hover, more than once, on the verge of escape, only to draw back in fear.

Act 2 comes, too, with music more striking than the cheerful pastiches of Act 1, including two genuinely superlative set-pieces for Little Edie. The lighthearted one is “The Revolutionary Costume for Today,” a loopy, grin-fueling, make-your-own-mark manifesto sung—patter-song style—by a onetime fashion-plate who looks like she’s been dressed by the ’80s-vintage Cyndi Lauper.

The potentially devastating one is “Another Winter in a Summer Town,” a heartbroken 11 o’clock number about the low, constant ache that comes from surviving your better days: “The summer’s over,” our once-and-forever debutante sings, “But I’m still a girl/Cavorting in my carnival crown.…My season ended/A long time ago/But no one took the party tent down.…Oh God, my God: Another winter in a summer town.”

Shatteringly good stuff, that last one, but at Studio it’s more poignant than flat-out prostrating—in part because Walsh seems reluctant to let her voice fully off the leash in such an intimate house. Damn the front-row patrons, say I, and apply some flame to that torch; a little fire, after all, ought always to be burning at a shrine, and Grey Gardens is nothing if not a ramshackle shrine to a couple of women who lived, if not always happily, then always determinedly by their own lights.