”If you want to start a rumor in Hollywood,” Arnold Schwarzenegger is saying, sucking coolly on a super-stinky, salami-size cigar, ”all you have to do is pick up a phone, call an agent, and say, ‘This is totally off the record. Promise you won’t repeat what I’m about to tell you.”’ He squints through the fumes. ”In five minutes, the news will be all over town.” Someone must be speed-dialing every agent in the book, because the gossip hasn’t quit swirling around Schwarzenegger’s latest crunchfest, Last Action Hero, since filming began last fall. *Rumor No. 1: The movie’s original $47 million budget has swollen to close to $120 million, making it one of the most expensive films ever made. *Rumor No. 2: It’s way behind schedule, with reshoots at one point nearly delaying its June 18 opening. *Rumor No. 3: Test audiences rated it so poorly at a May 1 screening outside Los Angeles that one studio executive suggested torching the scoring cards. All of which leads to: *Rumor No. 4, the unkindest murmur of them all: That Schwarzenegger-perhaps the most successful star in the history of motion pictures-is about to get hit by the biggest and costliest bomb of his 23-year career. ”Every movie I’ve done, there was always a buzz about how it was over budget, how it couldn’t come out on time, how it was a disaster,” says the man who made ”Hasta la vista, baby” a household phrase. ”That’s because everyone in this town is jealous of the next guy. They’re all a bunch of jealous bitches sitting around saying, ‘I hope he takes a dive!’ What do you think I’ve been hearing about Spielberg’s picture? The most hideous things.” But Last Action Hero seems to be stirring up even more negative buzz than usual, mostly because so much is riding on the film-and not just for Schwarzenegger. ”This summer will either make me or break me,” Columbia Pictures chairman Mark Canton remarked earlier this year. And he’s not the only one: More than a few Columbia execs have been mentally writing their resumes in recent weeks, just in case Action Hero performs less than heroically at the box office. ”If this movie is a bust, we’re f — -ed,” one Columbia insider puts it succinctly-and anonymously. ”The whole lot will be in trouble.” On paper, at least, Last Action Hero has everything an Arnold extravaganza needs to succeed. Part Terminator, part Purple Rose of Cairo, it’s packed with tons of gee-whiz special effects, cartoonish violence, and mercifully minimalist dialogue. Its through-the-looking-glass premise: Jack Slater (Schwarzenegger), a fictional film hero, pops into the real world after a young fan (Austin O’Brien) opens up the screen with a magic movie ticket, unleashing a bevy of fictional bad guys as well. Directed by action veteran John McTiernan (Predator, Die Hard, The Hunt for Red October), with a million- dollar rewrite by Hollywood’s favorite script surgeon, William Goldman (Indecent Proposal, Twins), and featuring Player-esque cameos by Sharon Stone, Chevy Chase, Jean-Claude Van Damme, Tori Spelling, and NBC anchor Maria Shriver (Mrs. Schwarzenegger), it sounds like the safest Arnold vehicle since the Humvee. But there have been problems. Early in May, just six weeks from the premiere and more than five weeks after Last Action Hero was supposed to have wrapped, filming is still under way at four in the morning on a narrow side street in downtown Los Angeles. About a dozen cars are idling in neutral, pretending to be stuck in a Manhattan traffic jam, as a rain machine sprinkles the block with a faux drizzle. Schwarzenegger is hopping up and down on the trunk of a taxi, practicing the scene in which his character spots the head villain (Charles Dance) and leaps from car top to car top to chase him down. The crew watches from under umbrellas, a surprising number of them chomping on huge, Arnold-style cigars. At one point a city bus rolls by with an ad for Last Action Hero (”Did somebody say Action?”) plastered onto its side. A few production assistants nod at it and smile. ”They did reshoots for Terminator just two weeks before it came out,” protests director McTiernan about all the talk. ”It’s become part of making an Arnold movie. He’s like a physical trainer, always pushing. ‘Do one more rep! You can do it!”’ Schwarzenegger offers a slightly different take on the late filming. ”We had a test screening,” he says. ”The audience reaction was fantastic, through the roof. But there were some people-maybe a few 17-year-old girls-who said they wished there were one or two more action scenes. When you have the word action in the title, or when you see me on the screen, people have certain expectations. It’s just one of those things. So we figured, why not shoot the scene?” In truth, though, those 17-year-olds weren’t the only ones underwhelmed by the May 1 screening. One audience member told Entertainment Weekly that the film was ”juvenile,” ”off the mark,” and ”confusing toward the end.” Another called it ”Willy Wonka with guns.” After the screening, rumors about the test scores were rampant in Hollywood. Some said the numbers were as low as 46 (meaning only 46 percent of the test audience would definitely recommend the film). Others put the figures in ”the low 70s”-not exactly promising for a purported blockbuster. ”The studio freaked out after the preview,” offers another high-level source inside Columbia. ”People were calling it Humpty Dumpty-all the reshoots and all the rewrites couldn’t put it back together again. The audience didn’t buy the central idea of it. It’s not really an action film and it’s not a comedy. It’s neither fish nor fowl.” ”It’s a false buzz,” says Canton. ”The truth is, I purposely had no (screening) numbers done. I had my assistants take the cards, file the cards, and never add them up. It’s the same thing we did with Batman at Warner Bros., because I knew that even if we scored a 90, someone would say it was a 10. And sure enough, I heard Action Hero was 78, I heard it was 48, I heard it was 38. So I kind of laugh when I hear the numbers. It’s the ultimate irony of how low people will go.” ”It’s the Others Must Fail theory,” concurs yet another Columbia exec. ”Some people believe that in order to succeed, others must fail. That’s why there are so many false rumors, so many bad stories, so many horrendous attacks.” The OMF theory, however, doesn’t explain all of Last Action Hero’s problems. The script, for instance, has seen more doctors than Cedars-Sinai. Conceived by two unproduced script readers, Zak Penn and Adam Leff, it was purchased for a trifling $350,000, then handed to Shane Black (Lethal Weapon) and his film-school pal David Arnott, who custom-fit it to Schwarzenegger’s specifications. But Arnold still wasn’t satisfied, and demanded another rewrite, this time by Goldman. Next Larry Ferguson (The Hunt for Red October) dipped his pen into the project. And even Charles Dance got into the act, writing much of his own dialogue. Estimated script cost: $2.5 million. Along with the rewrites there were some nagging publicity snags. While filming in New York City last winter, for instance, the crew inflated a 70- foot Arnold balloon in the middle of Times Square, complete with three sticks of TNT in his left hand-three days after the World Trade Center bombing. To avoid a potential public relations disaster, the studio performed corrective surgery to replace the TNT with a police badge. Then there was the fiasco with NASA. As a promotional gimmick, Columbia paid the space agency $500,000 to paint Schwarzenegger’s name and the words last action hero on the boosters and fuselage of an unmanned rocket due to blast off around the time of the film’s premiere. That idea wasn’t wildly popular with members of the National Coalition on Television Violence, who picketed Columbia last month, calling for the studio to paint children’s drawings about peace on the rocket instead. The Coalition will have another ) chance: Budget problems (this time NASA’s) delayed takeoff until August, when the movie opens overseas.