[lmm]

> If I sold a transparency with nothing but a twirly mustache on it, sized & positioned so that it perfectly placed the mustache on the original Mona Lisa if placed within the frame, would that be a derivative work?

To the extent that it's "based on" copyrightable expression in the Mona Lisa, yes. AIUI the key question is: would a viewer recognise the Mona Lisa from your transparency? And that would be a question of fact for the jury; personally guessing I'd say probably not from just the position of a mustache in a frame, probably yes if you included e.g. an outline of the pose. (In which case it might still be protected fair use, but it would be a derivative work, and you'd have to make that positive defence).