In a house near the Hollywood Hills, a silver-haired man of 65 picks up a guitar. Later, he will paint. He may grind a little coffee. But whatever he's doing, none of it is likely to involve anything even vaguely resembling the making of a feature film. This man is David Lynch – and that particular lack of activity is now, according to a more-or-less reputable source, permanent. The world's greatest living director appears to have quit the job.

The news was broken by another one-off of the old school, Abel Ferrara, who in the course of a recent interview let slip that his compadre "doesn't even want to make films any more. I've talked to him about it, OK? I can tell when he talks about it." And yes, this is only hearsay, but aside from Ferrara having no obvious reason to dissemble, it only confirms what many of us long ago sensed in our collective gut – that the five-year gap since his last film, the wildly ominous Inland Empire, is no mere extended holiday.

From Lynch, of course, there's been no announcement at all. Or rather, official word has focused on the latest step in his freshly-launched music career, a debut album to be released later this year, Crazy Clown Time. If the title seems plucked from a top hat filled with random Lynchian phrasings, the music may well provide the odd surprise: the preceding single Good Day Today is a dose of chipper pop-house that made for one of the strangest conversions to dance music since Michael Caine's 2007 chillout opus, Cained. Lynch has often moonlighted in the recording studio – but until lately always in conjunction with his films. Now, the album is the most concrete sign yet of a serious shift in priorities. Some time ago his website was stripped of any mention of movies and converted into a showcase for the "David Lynch Music Company".

Not that the last few months have revolved solely around Lynch's rebirth as a dance-floor Svengali – let's not forget the thematically-furnished Parisian nightclub, the Duran Duran webcast, the 16-minute Dior ad. That kind of promiscuity is nothing unusual in a career speckled with the extracurricular; even the five-year hiatus is par for the course. But this feels different. For one thing, throughout his other periods of creative wandering, Lynch always had a stack of movie projects waiting to be greenlit, most of which were public knowledge – exactly the kind now conspicuous by their absence. The sense of finality, meanwhile, hardly comes out of the blue: on top of a polite lack of interest in film during his own recent interviews, rumours among fans that "this is it" have been circulating for years (you can see a couple in the comments following the piece I wrote last spring, wincingly wide of the mark as it now looks).

And there's a precedent for Lynch falling out of love with his muse. After all, he already abandoned one aspect of making movies: the cumbersome business of shooting on film, the very thing that always made his nightmare visions look so good. Instead, after the gorgeous old-fangled spectacle of Mulholland Drive, he announced he was now embracing digital video at its cheapest and dirtiest, a move that would yield the scuzzed-up horror of Inland Empire. With hindsight, its tempting to see those last two films as the perfect way to end a career: Mulholland Drive the grand ode to Hollywood that would go down as his masterpiece; Inland Empire its murky and unnerving evil twin, bringing full-circle a story that started with that tour de force of the murky and unnerving, Eraserhead.

Or maybe not. It's unlikely the man himself is going to confirm or deny anything much besides the ongoing benefits of transcendental meditation. But personally, having been fixated with Lynch for as long as I've been smitten with film, and having spent large chunks of the last quarter-century waiting for him to make another movie, this is where I stop. And the strange thing is, that's fine.

The great 1980s noise band Big Black remarked on breaking up that it was an idea that had occurred to too few bands. A similar thing might be said of directors. If Lynch's last hurrah has come and gone without us realising … well, it will have ended a four-decade stretch in which the director never – really, not once – went through the motions. There would be something uniquely depressing about Lynch banging them out long after the passion had faded – forever wearily rearranging dwarves and cryptic old ladies. So if, at 65, he's chosen to give up films along with smoking, then I simply tip my Jack Nance wig to him and say goodbye. Backwards.