Incident at Loch Ness

Incident at Loch Ness is a mocumentary starring Werner Herzog. A video crew is doing a piece on the life works of Werner Herzog, who happens to be working on a new film called Enigma at Loch Ness. Enigma at Loch Ness is essentially a documentary on the needs of a society to create monsters and focuses on the monster of Loch Ness Lake as an example. What the audience sees is essentially the video crew's document of the making of this movie and it sheds light on, and pokes fun at, Werner Herzog's precarious method of working and the lore surrounding his own body of films.
Incident at Loch Ness was directd by Zak Penn who, in the film within a film, plays the producer of Enigma at Loch Ness which is being directed by Herzog. Penn and Herzog co-wrote this mocumentary and it has some really funny moments. For instance, there is a moment when Zak Penn is arguing with Herzog about whether or not to shoot a fabricated scene involving the Loch Ness monster. Remembering the legendary story about when Herzog directed Klaus Kinsky at gun point, Penn, pulls out a gun and tries to force Herzog to shoot the scene. Herzog disarms him by letting him know that he is holding an unloaded flair gun and that the legend is not true anyway.
It has been said that when making a comedy, you have to give the audience permission to laugh in the first few minutes. With a few exceptions, the laughs in this film are generated in a realistic way. They are born out of context which takes 20 minutes or so to set up. So it's quite a while before you may see any humor in the situation. The performances are very realistic and walk a very fine line between reality and fiction. There are only a few moments when you sense a manufactured tone or a forced laugh. By the end, I was laughing at a constant.
If the laughs are below the surface, I found the film pretty interesting on the surface. It was fun to see a Herzog production from the inside even if he is only playing a caricature of himself. It was fun to see how the crew deals with sound, cinematography, actors, and wardrobe. And in an ironic way, the film that Herzog sets out to make, gets made in the documentary about him.
I highly recommend this film to anyone who likes Herzog, mocumentaries, or filmmaking in general.

Also, Brandon, the film crew making the documentary is treated like one of the characters in the film, similar to your Thems Mutants script, and their footage represent what the audience is watching. You might appreciate how nimbly they do this and how they justify why film is always rolling.