Peter Jackson got his start doing "Splatstick" movies that were funded with the help of the Australian government. I own two of them, including the classic horror spoof gone nuts known as
Dead Alive.
Dead Alive was quite good in a silly/gory/low budget kind of a way, and you can definitely see his chops as a director with his use of forced perspective, lighting and camera angles. Its not for everyone, though.
http://www.rottentomatoes.com/m/dead_alive/
Meet the Feebles, however, is possibly the single most insane movie I've ever seen. I don't even know if its good, bad or what. Its just there and its friggin' weird. Imagine a behind the scenes of the Muppet Show with pimps, adultery, drugs, addicts, murder, sex and STDs. I don't even know if I like it, all I know is that its a must see.
http://www.rottentomatoes.com/m/meet_the_feebles/
I have not seen
Bad Taste, but I really want to.
http://www.rottentomatoes.com/m/bad_taste/
As for Jackson's other pre-LOTR work that was mainstream, he also did
The Frighteners which I thought was very good, and
Heavenly Creatures which is a wonderful film.
http://www.rottentomatoes.com/m/heavenly_creatures/
http://www.rottentomatoes.com/m/frighteners/