I heard a song yesterday with the exact tune from Little Hands, with lyrics just in the places Steven said they'd be. It didn't sound like Wayne singing... What was it??

Never mind. I listened to the Soft Bulletin version again and heard the reference to Skip Spence...

Wow, the lyrics... "no place to fall"
The Lips have/Wayne has come a long way from the place where they'd/he'd want to cover a song with those lyrics...

This was done as some sort of collaboration where Steven was doing some work for Robert Plant to sing on, wasn't it?

Yes. It was for a tribute album for 60s psychedelic artist Skip Spence, and it was supposed to be a duet with The Flamign Lips and Robert Plant. He never called them back.

Also of note A White Christmas (demo for Tom Waits) was the same sort of deal... The Flaming Lips were originally going to make a Christmas album with duets with all sorts of artists (from Marylin Manson to Shirley Manson) as the followup to Soft Bulletin. Thus the "demo for Tom Waits" tag. Honestly, I'm kinda glad the project was scrapped for the Yoshimi/Okie/Xmas on Mars projects....