Thirty years on from its botched original release, Ivan Passer's note-perfect, sun-splashed neo-noir thriller Cutter's Way has slowly fought its way up from cult obscurity. As one of the lucky few who saw it then, and having loved it madly ever since, I couldn't be happier to see it available once more.

Released in 1981, it's like the last Hollywood movie of the 1960s, in which the aspirations and ideals of that long-gone decade finally soured irrevocably on its dazed, burnt-out survivors. It belongs alongside Karel Reisz's Who'll Stop The Rain (its perfect double-bill doppelganger), and Arthur Penn and Alan Sharpe's Night Moves – both visions of a post-Vietnam, post-Watergate American malaise.

Cutter's Way opens with a girl's corpse dumped in a trashcan in a rainswept Santa Barbara back alley, witnessed by broke, thirtysomething country-club gigolo Richard Bone. Bone doesn't know for sure what he saw, but his one-eyed, one-legged, one-armed Vietnam-veteran high-school buddy Alex Cutter, riven by unquenchable rage over his injuries and determined to make somebody – anybody – pay, decides the killer must be local oil potentate JJ Cord (Stephen Elliott).

Thus do one man quite broken inside and another almost physically demolished by war team up to hunt this great white whale of a murdering capitalist. Cutter is a demented Ahab while Bone, vacillating, spineless, beautiful – Cutter sneeringly dubs him "the fastest dick on the beach" – well, call him Squishmael. Together they can cobble together one insanely reckless demi-hero from the human rubble that is the pair of them, and everything ends with a white charger and two men's hands aiming a single gun.

Like Who'll Stop The Rain, Cutter's Way is structured around a profoundly dysfunctional trio, brought to vivid life by consummate character players. John Heard, then almost unknown, is Cutter, a showy, noisy part, while Jeff Bridges has the quieter, more difficult role of Bone. The truly unforgettable performance comes from Lisa Eichhorn as Cutter's abused and defeated, hollow-eyed alcoholic wife Mo, the soul of the movie, delivering, in her thin, cracked voice, such vicious putdowns as (to feckless rent-boy Bone) "Home so early, Rich? You couldn't find a matron with a taste for gutter squalor?" Jeffrey Alan Fiskin's literate dialogue retains a malign sparkle throughout, and Eichhorn's turn was rightly dubbed "the most underrated performance of the 1980s" by the AFI.

Cutter's Way is a movie that starts yielding up its real treasures around the third viewing, so stick with it (you'll hate the ending first time out). I've seen it perhaps 30 times – it may be my favourite American movie – and, unlike its three broken leads, I have still yet to hit bottom. For once, the word is appropriate: masterpiece.

Cutter's Way is out 24 Jun