This may be one of the weirdest movies I have seen in years. In the late sixties, on an island off of Australia, a radar expriment goes awry on New Year's Day, causing time and matter to become warped. This doesn't really explain why inanimate objects come to life or why people end up looking like zombies.
In the 80's a group of Australian friends, who are harassed by some thugs at a local carnival, decide to take a boat out and visit a nearby island. Their rowboat ends up sinking. They find a mostly deserted hotel on the island, though people keep on appearing and disappearing. There's the 1950's type rock and roll band, the burned airplane pilot and a stair bannister that comes alive and bites one of the guys. Then those hoodlums show up and become crazy mixed up zombies.
BLOODY NEW YEAR definitely has an 80's feel to it, which probably adds to the overall weirdness.