EVERY other movie is being turned into a musical these days, so why not that tacky touchstone of the disco era – “Xanadu”?

A musical version of the much-maligned 1980 Olivia Newton-John vehicle was unveiled to potential investors last week at New World Stages.

The producers are trying to raise $2 million to bring the show to an off-Broadway theater in the fall.

For their backers’ audition, they managed to line up a first-rate cast, including Jane Krakowski and Broadway heartthrob Cheyenne Jackson (“All Shook Up”).

It’s hard to imagine that a show based on a movie one critic called “the most dreadful, tasteless movie of the decade – indeed, of all time” could be much good.

But I’ve got to report that the buzz isn’t terrible.

“You’ve got to like camp, but if you do, it’s fun,” said a person who attended the workshop.

The best thing going for it, apparently, is a funny script by Douglas Carter Beane, who also wrote last season’s critically acclaimed off-Broadway play “The Little Dog Laughed,” which is moving to Broadway in the fall.

“He embraced the inherent tackiness of the whole thing,” my spy says.

Directed by Chris Ashley, “Xanadu” features many of the, um, memorable songs from the film – “Suddenly,” “Magic,” “All Over the World.”

“It was like going back to the ‘Solid Gold’ era,” my spy adds.

Ah, but do we really want to go there?

WHILE we’re on the subject of the Oli via Newton-John collection, a revival of the musical that was made into her most famous movie – “Grease” – is coming back to Broadway.

The Nederlanders have lined up Tony Award-winning director Kathleen Marshall to stage the production, slated to open in June 2007.

They went after Ricky Martin to play Danny Zuko, but he turned them down.

So now they’re taking the “Sound of Music” route that Andrew Lloyd Webber took in London – making a reality show out of the casting.

The search for the next Sandy and Danny will play out on NBC’s upcoming show “You’re the One That We Want.” Marshall will be one of the “talent judges.”

It may seem a bit premature to bring “Grease” back to Broadway: It wasn’t so long ago that Fran and Barry Weissler made a pile of money with the low-rent revival directed by Tommy Tune.

But as one veteran producer points out, “Grease” is one of the most popular shows of all time (the original production, in fact, ran on Broadway from 1972-79) and “always gets an audience.”

YET another revival is circling Broadway: “Inherit the Wind,” the classic 1955 courtroom drama that was inspired by the Scopes “monkey trial.”

Christopher Plummer has signed on to play Matthew Harrison Brady, the fanatical lawyer who attacks Darwinism.

The revival will be directed by Scott Ellis, who won rave reviews two years ago for his Broadway production of another classic courtroom drama, “Twelve Angry Men.”

“Inherit the Wind” has yet to find a Broadway theater, but production insiders are confident they’ll have a home in the fall, when weaker shows are likely to pack it in.

The play was last seen on Broadway in 1996 with a cast headed (briefly) by George C. Scott, who quit the production because of poor health.

Also circling Broadway are “Curtains,” the new musical comedy by John Kander and his late writing partner Fred Ebb, and a musical version of the cult hit movie “High Fidelity.”

“High Fidelity” opens in the fall in Boston. Its producers would like to snap up the Imperial Theatre should “Dirty Rotten Scoundrels” close before the end of the year.

“Curtains,” starring David Hyde Pierce as a showtune-loving detective, opens in Los Angeles tonight, and its producers have made no secret of the fact that, if the reviews are good, they’ll bring it to New York.

They’re said to be eyeing the Al Hirschfeld, where “The Wedding Singer” continues to defy me by staying open.