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What’s this? Has Sonic Youth–the most celebrated of the mind-bending bands to emerge from Manhattan’s Lower East Side art scene in the early ’80s–gone domestic? It certainly looks that way.

Thurston Moore’s 6 1/2-foot frame is draped over a dining room chair in the SoHo loft he shares with Kim Gordon, his wife and band mate. Guitars are propped in the corner of the spacious living room and baby toys litter the carpet. Moore’s mother chats with Gordon about the joys of rearing a daughter–that would be Coco, who recently celebrated her first birthday. Coco flirts with a visitor and giggles delightedly as Moore hoists her diaper-clad bottom over his shoulder.

“She loves to check people out,” Moore says with a proud paternal smile.

It would be easy to draw out the symbolism and say that Moore and Gordon have a similarly parental relationship with the post-punk underground scene they helped create, which in the ’90s has become a full-grown rock commodity.

Yet having Sonic Youth headline Lollapalooza, the traveling rock festival that opens Tuesday in Seattle and arrives July 15 at the New World Music Theatre, still seems a bit odd. The effect might be likened to David Lynch’s “Blue Velvet” closing a Frank Capra film festival, a disturbing coda to a day of reassuring entertainment.

This year’s Lollapalooza boasts platinum-selling acts such as Hole, Sinead O’Connor and Cypress Hill; indie-rock icons such as Pavement and Beck; and party punkers the Mighty Mighty Bosstones. For listeners who walk a more adventurous path, however, only the Jesus Lizard and Sonic Youth offer a true musical alternative.

Both bands get little or no airplay on commercial rock stations or MTV, in part because both continue to challenge themselves and their audiences with music that is by turns enigmatic, grim, powerful and downright scary. But it’s one thing to have the Jesus Lizard in an early slot on the bill, quite another to have Sonic Youth as the nominal headliner, the supposed main draw, on what has become a $27 million a year mainstream event, a festival that coincided with the aggressive marketing of music once deemed “alternative.”

“I know the general population of MTV-land would love to see bands like Live, Stone Temple Pilots or White Zombie–whatever is chart-busting at the time–in the slot we’re in” at Lollapalooza, Moore says. “So it was kind of weird when they asked us. And it’s going to be weird for us, because we’re going to be playing 75 percent new material and the rest from our last album, which was pretty odd and not really promoted. So I think by the end of the day, things are going to get a bit esoteric for people who started out partying with the Mighty Mighty Bosstones.”

Moore laughs when he is reminded that three years ago he wanted no part of Lollapalooza. “We want to build our own studio, and this is one step toward that,” he says. “We can make a lot of money without doing that much work because Lollapalooza is an easy thing to plug into, a money machine. Otherwise I feel like an employee of the festival. It’s kind of a corny thing.”

Although there’s a lot of lip service paid to musical diversity and multiculturalism by the Lollapalooza organizers, who include former Jane’s Addiction singer Perry Farrell, the reality is that the festival is too big to take many aesthetic risks. Moore sees its constituency as musically conservative, spoon-fed by MTV and its endless parade of videos trumpeting mediocrities such as Bush and Rancid.

“It draws a crowd of university kids with a spring-break mentality,” he says. “That was one reason I thought that I could never be part of it.”

Yet Lollapalooza is one of the centerpieces of a youth culture that Moore, 35, still cares about deeply and can still address directly, because Sonic Youth’s perspective has always been that of outsiders. As the sunny California side of Reaganism dawned on the ’80s, Sonic Youth conjured up the ghosts of soured idealism in “Death Valley ’69” and found strange comfort in the pop vacuity of Madonna, in their mid-’80s side project, Ciccone Youth. In later years, songs ranging from the 1988 “Teen Age Riot” to “Psychic Hearts,” the title track of Moore’s new solo album on the DGC label, showed a previously unheard compassion, directed primarily at the young betrayed by the me-first ’80s.

“I sort of look at it more like I’m the big brother,” Moore says. “We’re not going to pretend we’re part of a scene of 20-year-olds in bands, but in a way we are. When I talk to people in a band like Bikini Kill, I realize that they were 12 years old when we started out, and they looked at us as celebrities when they were growing up. Now they’re our peers. I think the best way to deal with that is to act your age and not get into this Aerosmith thing of writing teenage anthems. But I think it’s also important to address that demographic because those are basically the people who are listening. The idea is to stay true to yourself as an adult while still relating to this youth culture you’re still a part of.”

For Sonic Youth, staying true means challenging itself and its audience almost continually: Never has this band been more visible, yet it is making its most abstract records in a decade. The music culminating on the 1992 “Dirty” album represented Sonic Youth at its most concise and direct, a warped if engaging attempt at more conventionally structured, melody-based songs. But with the 1994 “Experimental Jet Set, Trash and No Star,” Sonic Youth began exploring a more spontaneous framework, tinged by misshapen blues, simplistic, almost absurd, lyrics and ramshackle arrangements.

“It was all based on first-impression composition, a weird, minimalist record that was totally the opposite of the really layered, textured, elaborated sound on `Dirty,’ ” Moore says.

On Moore’s “Psychic Hearts” solo disc, warped pop riffs rub shoulders with expansive instrumental textures, a bridge back to the early Sonic Youth that specialized in haunted, corrosive soundscapes such as “Expressway to Yr. Skull.” The album-closing “Elegy for All the Dead Rock Stars” expands and contracts for more than 15 minutes, the guitars of Moore and Tim Foljahn twisting around Steve Shelley’s drums. Moore says the next Sonic Youth disc, “Washing Machine,” recently completed in Memphis and due out in September, digs even deeper into long-form guitar epics, containing only a half-dozen songs.

“We’re sort of letting the gate open now,” he says. “The `Elegy’ track is especially important to what’s happening now. I did a couple of West Coast solo gigs and they were purely instrumental. I can hardly play jazz music but I like playing improvisational music.”

Moore has recently collaborated with members of the post-Coltrane jazz community such as William Hooker, and at its most adventurous, Sonic Youth suggested the astral jazz of such pioneers as Sun Ra, a connection made explicit a few years ago when the band co-headlined a Central Park concert with the Chicago-born legend.

“Now you see a lot of mid-20s college kids listening to free jazz, experimental Japanese music, because they see bands like Rancid and Green Day and how punk has been turned into a commodity,” Moore says. “It’s a whole new underground that didn’t exist when I started, but that’s the music I’m also buying now, the fanzines I’m writing to and the tape labels I’m communicating with. That scene to me is a whole lot more vibrant than anything Lollapalooza has to offer.

“The Sun Ra gig, that was much more important to us than any show at Lollapalooza will ever be. Because that was about searching, innovative, experimental musical ideas, and that’s what we want full-time involvement with. We never want to become just this band that plugs into the machinery and records and tours and makes videos because it’s the thing to do. To us it’s always been about the journey.”

THE ’80S `SONIC’ BOOM IS ON CD

Sonic Youth’s highly influential 1980s albums have recently been reissued on CD by Geffen Records, with the exception of the self-titled 1982 debut, due later this year. Thurston Moore commented on the discs, with Tribune star ratings in parentheses:

“I like the full-on abandon of `Confusion Is Sex’ (1983 (star) (star)). `Bad Moon Rising’ (1985 (star) (star) (star))–that was a real potent time for us, just as we were getting recognized. It was a weird, seamless record of soundscapes. `Death Valley ’69,’ a song we did with Lydia , was tacked onto the end, but that got us into the more straight-ahead stuff. . . We began touring a lot and seeing how bands like Dinosaur took classic rock and added noise guitar to it.

” `EVOL’ (1986 (star) (star) (star) 1/2) and `Sister’ (1987 (star) (star) (star) 1/2) were twin albums, in which we were trying to get more involved in sophisticated songwriting. `The Whitey Album’ (1988, under the nom de rock Ciccone Youth, recording assorted Madonna covers and Robert Palmer’s “Addicted to Love,” among other works,(star) (star)) was us throwing caution to the wind, our most experimental album. We wanted to keep it a secret, just let it slip out without any credits on it, but it didn’t work out that way. I think it sort of defeated the record, but to date it’s one of my favorite things we’ve done.

” `Daydream Nation’ (1988(star) (star) (star) (star)) was a culmination, blowing out what we did on `Sister’ and `EVOL.’ We’ve been using traditional elements ever since , but. . . we’ve had our fill. We’re getting back into more of a screwed-up thing.”