A national tour was booked featuring this Brechtian musical review, drawing relatively small crowds. Fighting Clowns failed to spark most of the old fans. Sales were dismal, and not what the album deserved for it was a well thought out introduction to the 1980s with songs and dialogue pieces wonderfully put together. The Firesign Theatre referred to themselves musically as the 8 Shoes but they seemed to have lost their footing in the Reagan years.

They appeared on the live TV comedy show Evening At The Improv, performing another Nick Danger piece Frame Me Pretty (1981). Some of the previously recorded projects were released on Rhino, Lawyer's Hospital (1982), an interesting collection of unreleased live appearances, segments from the Cassette Chronicles and real commercials for Jack Poet VWs. An edited album-length version of the NPR Shakespeare's Lost Comedy (1982) was released at the same time.

The Firesign Theatre was producing a lot of work and nobody seemed to care. All but the most loyal fans had all but dissipated. They worked very hard at numerous projects but none seemed to pay off for all the effort. Nobody could figure out how to properly market the group or its products, a problem that continues up to this day. This started to put a financial strain on the group, particularly Ossman, who had been living in Santa Barbara, and was out of the Hollywood commercial pipeline. Reluctantly, Ossman left the West coast to take a job at NPR in Washington, DC hosting a five-hour weekly "Sunday Show" in 1982 and later to pursue a solo career producing radio programs for WGBH in Boston, and conducting workshops in radio Theatre arts across the country through the decade.

The others formed Pyro Playhouse and opened up offices in Hollywood to do business in any media they could. The new Firesign Theatre groped through the teflon decade of the empty 1980s without one of it's major voices, and tried to compensate for this by pushing the envelope of technology. They hooked up with former Monkee, Michael Nesmith's Pacific Arts Video and a Japanese company to produce a project that was to be the first interactive video. In a sense all of Firesign's recordings were interactive because they demanded a lot of participation from the listener. The Japanese pulled out along with their financing, and the project was barely salvaged by personal funds from everyone concerned. The Case of the Missing Yolk (1983) was an interesting, classy, low budget, Nick Danger vehicle with some very funny commercial parodies, and videographical sight gags and special effects. It received some cable TV air play and is still widely available in the video rental stores, and is scheduled for re-release on DVD.

Firesign went for another media by producing an RCA CD video-disc, using a laser activated needle, only playable in RCA machines. Hot Shorts (1984) was a vocally overdubbed collection of lightly edited Republic Movie Studio cliff hanger serials of the 1940s and 1950s, spiced up with blatantly sexual humor and dialogue. It was a project that was very similar to Proctor and Bergman's 1978 film, J-Men Forever, though not as highly edited or as cleverly written. Hot Shorts has since been transferred to video-tape and it too is widely available for rental. Next, they transformed the Nick Danger episode, Frame Me Pretty into The 3 Faces of Al (1984), their first 'new' material in years and the very first digitally recorded comedy album. It was released on Rhino on vinyl and CD and nominated for a Grammy but lost out to Weird Al Yankovic.

In 1985 The Firesign Theatre was approached by Phillips to write two demonstration games for their new CD Interactive machines. Eat Or Be Eaten, was recorded as a 99 track demo and the accompanying graphics made but the actual finished project was never published commercially. Danger In Dreamland, a Nick Danger Hollywood studio back-lot murder mystery game, was written but not recorded. Eat Or Be Eaten (1985) was salvaged and released as the first CD with subcode graphics, and the game paths strung together to form a story with some commercial parodies, on Mercury Records. The commercials were excised and put out for radio airplay in both a 7" and 12" version called Bites From Eat Or Be Eaten. The theme was further developed into a highly successful 30 minute Cinemax special, also called Eat Or Be Eaten (1985), that too, has been released on video (1986). The remaining Firesigners also provided voices for some of Mattel's Intellivison games, including Bomb Squad and B52 Bomber.

In the late 1980s, Pyro Playhouse ran out of work and closed their offices, officially ending The Firesign Theatre. All four individuals then concentrated solely on their own careers and families.

Mobile Fidelity Labs purchased the rights to release the essential Columbia Firesign albums on CD, soliciting new liner notes from the former members. Don't Crush That Dwarf, Hand Me The Pliers (1987) came out with startlingly good sales figures. Old fans were delighted with the clarity of sound that was missing from their old, over-played, phonograph records. Mobile Fidelity continued its re-releases with How Can You Be In Two Places At Once, When You're Not Anywhere At All? (1988), I Think We're All Bozos on This Bus (1989), Waiting For The Electrician, Or Someone Like Him (1992), and Dear Friends (1992). Sales were respectable, prompting the men to talk of a reunion when all four gathered together, for the first time in many years, to attend Phil Proctor's third wedding in 1992.

A promotional group came up with the money to sponsor a one-off 25th Anniversary Reunion Concert (24 April 1993), at the Paramount Theatre in Seattle. Media Moguls and die-hard fans gathered from across the country to attend the event. The four members approached the stage with apprehension and trepidation, but the audience received them with a five minute standing ovation before they could even say a word. It was a humbling and exhilarating experience, enough to give them the confidence to allow the old chemistry to work its magic again.