In 2001 the English screenwriter Jeremy Drysdale, scouting around for a subject for his first screenplay, remembered a story he'd heard of a man, taken by his friend, to be cremated in the desert where he felt most at home. In the aftermath of September 11th Drysdale says "I didn't want to write a shoot 'em up movie, I wanted a story about friendship". He discovered that the body in question belonged to that of Gram Parsons and that the man who had stolen the body was still alive.

Drysdale says, "while it's a nice story and a lot of fun, it's actually about something that really happened, about a man who decided to put his life on hold and to take a risk and to do what he thought was the right thing. As I read up on the story, I couldn’t believe that it had never been made into a movie, it was such a great story."

Drysdale phoned Kaufman in Nashville. Kaufman had been approached dozens of times over the years with people claiming they wanted to write his story but nothing had ever come of it. He asked Drysdale to fly out to meet him and the pair spent three days together. Kaufman agreed to give Drysdale the rights, "The only promise Phil Kaufman wanted from me was that I wasn't going to mess his story up. For me this was a movie but for Phil Kaufman this was his life." For Kaufman, it's about redressing the balance too, "This is not Gram's film, it's my film. It's about me and Gram and a promise I made to him which he made to me."

The first draft took three months. Drysdale then got in touch with the Irish director David Caffrey as they shared the same agent. The two of them worked the story up together. Caffrey felt very strongly that Gram's real life father should make an appearance in the movie. He says, "I wanted to bring Gram's lost father back. Here was a guy who had married into a difficult family, who had lost the chance to get to know his son and who was probably the main reason for Gram's self destructive behaviour." While Drysdale insists that the script is faithful to the actual events, "A person who deserves a lot of the credit for the film is Phil Kaufman because he's the guy who put his freedom on the line to do the right thing." When Kaufman read the script he says "I really got excited, it’s serious black humour. I didn't want it to get too soppy, y'know, goodbye Gram, I'll take the bullet for you."

Frank Mannion, who had previously worked with Caffrey on Divorcing Jack, agreed to produce the film. Mannion originally intended the film to be an ultra low-budget movie funded with his own credit cards, hence the name ‘Swipe Films’ for his production company. Casting director and co-producer Randi Hiller soon joined the team. Randi had cast some of the biggest budget Hollywood films such as T3: Rise of the Machines and S.W.A.T but each year she keeps some time aside for one pet project. In 2001 it had been the Academy Award winning In the Bedroom. In 2002 it was to be Grand Theft Parsons. It was Hiller who suggested Johnny Knoxville for the role of Phil Kaufman. She says "I was at home one night watching television and I saw an interview with Johnny Knoxville and I just knew that he was our guy." Knoxville from Tennessee, was already a big fan of Parsons and knew the story of his death and cremation. Knoxville says, "It's an insane story about two extraordinary people, and it's all true… I'm a huge Gram Parsons fan so when I heard they were making a movie about this famous underground story immediately I had them send the script to me." Knoxville was a real draw for the other actors too. Robert Forster says; "One of the real reasons I did this picture was because I knew Johnny Knoxville was going to do it. I'd heard of Jackass, I'd never seen it but I knew it was Candid Camera on steroids. When I got a load of the movie I realised that this guy is talented and fearless."

Knoxville agreed to work for whatever the producers could pay him and gave them his cellphone number so that they could contact him as and when they wished. David Caffrey says, "I knew a little bit about Jackass and I'd seen a picture of Johnny Knoxville but I just felt in my bones that he could pull this role off." Because Knoxville came on board so early, Caffrey and Mannion kept him in the loop. Knoxville in turn was instrumental in making sure the production got off the ground, securing crucial sponsorship, downing more than a few jars with the film's potential financiers and staying in the ropiest motel the USA has to offer, all without a murmur. Caffrey says, "During the Jackass promotion Johnny was growing a beard. People were saying, 'what's Johnny Knoxville doing with a Fu Manchu beard?'" Knoxville also researched the story and flew to New York to have dinner with Kaufman and his wife, dressing up in the identical clothes Kaufman had worn to court. Kaufman says, "I found out that Johnny wasn't a total goof. He's an intelligent guy, a crazy funny guy, which is basically what I am." Knoxville says of Kaufman, "It's really tough to have a conversation with Phil Kaufman because everything is schtick. He comes from a vaudevillian family and any sentence you say to him, he's going to have a one liner for."

With Knoxville attached and enthusiastic, the production team decided they needed to raise the budget to slightly more than the £50,000 loan that Mannion had secured from various banks. This would enable them to do the script and cast justice and would pay for a first rate crew. They also needed to re-create an authentic 1973 period piece. Four weeks before shooting began the backers pulled out. It was also, appropriately enough, the anniversary of Gram's death. Mannion and Caffrey broke the news to Knoxville and Mannion promised he would find the money somehow. Mannion approached practically every film company, sales company and studio to no avail.

Then the casting director, Randi Hiller, mentioned that she knew a Wall Street trader who had passed on In the Bedroom and may be interested in this film. She approached the trader, Matt Candel. Mannion sent him the script. Within an hour and a half of reading it he had pledged $100,000 of production money and suggested another friend, Brad Zipper, who may be interested in investing. Knoxville was in New York doing readings with the director and Mannion arranged for the pair to meet the would-be financiers for drinks. Caffrey and Knoxville took it in turns to woo them. As Knoxville says "When David was in the restroom I would lean across and say 'he's a really great director'. Then I would get up and leave and David would say 'he's really great in this role'”. They'd secured by the end of the night a promise of almost half of the investment needed to make the film plus promises that there would be more traders interested. By the end of the following week, Mannion had negotiated a deal where more than 15 other New York based friends and family of Candel and Zipper pledged the remaining portion of the budget he needed to fully finance the film. There were deeper reasons why the traders felt moved to invest in the movie. Executive Producers Matt Candel and Brad Zipper, lost their best friends in the World Trade Center on Sept. 11, 2001, and strongly identified with the film's theme of the bond of friendship and its untimely loss. They named their company Morty-Stevie G Productions after their friends, Morty Frank and Steven Genovese.

Thankfully, according to Mannion and Caffrey, one of the film’s biggest champions was Redbus Film Distribution's production arm Redbus Pictures, co-producers of BEND IT LIKE BECKHAM. They had been involved ever since a chance meeting at the BBC party in Cannes led to a read on the flight back to London, and remained committed as co-producers through the tough financing process. With the money in place, the biggest challenge was to shoot the film in 24 days.