In the spoken-word piece ''What's He Building?'' Tom Waits puzzles over the mysterious goings-on behind a neighbor's doors: ''He's pounding nails into a hardwood floor/And I swear to God I heard someone moaning low.'' Waits could easily be talking about himself and the willfully eccentric direction his music has taken. Increasingly, his bar-toad singing and writing has given way to a grotesque deformity that's made his albums admirable yet hard to enjoy.
Waits hasn't completely abandoned those impulses on Mule Variations. He's still given to carnival-freak-chic story-songs, like ''Eyeball Kid,'' and his maudlin high-plains-loser themes verge on self-parody. But the album restores the wizened humanity and a more traditional sense of songcraft to his music. Weathered-beauty ballads like ''Hold On'' and ''Picture in a Frame,'' and the exhortative, preacher-style ''Come On Up to the House,'' are more direct and less mannered than his recent work, and the grunting guitars, rhythmic bumps in the night, and creaky harmonicas are white-boy blues at its spookiest. Plus, Waits isn't singing through a megaphone anymore. At a time when rhythmic soundscapes have become as important in pop as melody, Mule Variations presents Waits as the biggest freak of all: the last of the classic American tunesmiths. B+