I found this useful study of the Shakesperian element in the film:
"Shakespeare, he's in the alley": My Own Private Idaho and Shakespeare in the streets
Literature Film Quarterly, 2001 by Davis, Hugh H
In his song "Stuck Inside of Mobile with the Memphis Blues Again" (1966), Bob Dylan sings, "Well, Shakespeare he's in the alley/With his pointed shoes and his bells" (Dylan 228). Dylan's image of an outof-his-time Shakespeare relegated to some alley always remains strangely compelling because of its incongruity. Curiously, this odd image is seemingly brought to life in Gus Van Sant's My Own Private Idaho (1991), a modern retelling of the Henriad, when the bum Bad George appears late in the film, wearing shoes that are, in fact, adorned "with bells." This alley-figure arrives fittingly near the culmination of the film, which attempts to move Shakespeare into the streets.
Shortly after the success of Drugstore Cowboy, Gus Van Sant looked to create his next film from two screenplays he already had-one the story of hustlers and the other an updated adaptation of Henry IV.1 Van Sant's film is a remake of Orson Welles's Chimes at Midnight (1965), an ambitious film taken from the Henry plays which tells the story of Falstaff. Thus, Idaho transforms Chimes, which reformats Shakespeare's version of Holinshead's history. Van Sant's inspirations also include Silas Marner, The Satyricon, and Dickens (Loud 35), but his greatest inspiration is clearly and admittedly Welles's film, to which he is paying homage as much as he is reviving Shakespeare (Johnson 101). Chimes was Van Sant's introduction to the story, and he started his screenplay upon seeing the picture (Simon, "Urban" 61).
Finding the tale of King Henry and Falstaff "a natural street story" (Arisen 68), Van Sant began fashioning a story in modern Portland, as he found a "gritty quality" in the Henry IV plays (Fuller xxv). (He, in fact, originally planned to cast the film with actual street hustlers [Ansen 68]). To bring the concepts in Chimes to the modern Northwest, Van Sant reworked dialogue and utilized basic plot. The result is "Van Sanitized" Shakespeare. The film's design, described as "Denny's Meets Shakespeare," is an intriguing mix of elements that includes costumes which evoke Elizabethan dress as well as more recent fashion and decor (Loud 36). (Bad George's footwear-and, indeed, his entire "Michael Jacksonian" outfitseem to suggest a court fool). The script similarly shows elements of both modern street slang and Shakespearean dialogue. Gus Van Sant takes traditional scenes and speeches and adapts them, creating lines that echo the Bard while also conjuring images of the street scene of hustlers. For example, Shakespeare's "Unless hours were cups of sack.. and clocks the tongues of bawds, and dials the signs of leaping-houses ....," in a speech by Hal (I Henry IV 1.2. 6-9), becomes "Why, you wouldn't even look at a clock, unless hours were lines of coke, [or] dials looked like the signs of gay bars . . ." (Arisen 68). The attempt to make the film fit the modern Portland scene required changing the tone of the language as well. Hal's question, "How long is 't ago, Jack, since thou sawest thine own knee?" (I Henry IV 2.4. 324), thus becomes Scott's question, "How long has it been, Bob, since you could see your own dick?" (Van Sant, 1990 41). Even with such alterations, the film shows the influence of Shakespeare. Unlike the Welles predecessor, which cites writing credits for Welles, Holinshead, and Shakespeare, Van Sant's movie is presented as his own; Van Sant is the writer, with a credit announcing "additional dialogue by William Shakespeare."