It's one in the afternoon, and Panic! At the Disco have convened at a studio deep within Las Vegas' Palms Casino Resort to work on a follow-up to their million-selling debut, A Fever You Can't Sweat Out. To stoke creativity, first-time producer Rob Mathis — a string arranger on Jay-Z's American Gangster — rattles off a few verses from Dr. Seuss (today's selection: On Beyond Zebra!). Unconventional, sure, but it can't hurt. Did we mention this is the band's second stab at a second album?

Emboldened by having a few more bucks to hang out in the studio longer, the group originally set out to record a concept CD. ''We had this elaborate, weird story,'' notes bassist Jon Walker, 22, unable to explain the...concept. Suffice it to say, they scrapped it. Lesson learned: Keep it simple. ''We were, what, 17 when we made the first record?'' remarks singer Brendon Urie, 20. ''We got kicked out of our houses, lost our jobs — those are the songs that came out. Now we're in a good place. What can we do but rejoice?''

So with attempt two, they're embracing their newly charmed lives. (Like, that snare used by Spencer Smith, 20? It's a $1,400 drum made of wood fished from the bottom of Lake Superior.) To demo what this privileged frame of mind sounds like, the band cue up a new track, the tentatively titled ''Nine in the Afternoon,'' a cheery cut with ''Penny Lane''-type horns. They admire their work, sitting in the same cushy studio rented by Celine Dion and the Killers. ''Our growth is like a tumor,'' snickers Urie about the slow, sometimes painful gestation of their sophomore effort. Adds guitarist Ryan Ross, 21: ''It's benign [now], but check back with us in six months.''