Wikipedia has
Sanatorium Under the Sign of the Hourglass listed as their next feature film.
While looking for information on it, I found
this page, which has the film listed as a short made in 2006:
Brothers Quay: Sanatorium Under the Sign of the Hourglass
Production: Koninck Studios, 2006 - 9 min - Beta SP - color & b/w
Here are a couple of interview excerpts where they mention their desire to make a film of Schulz's
Sanatorium:
Quays: When we're asked, “How do we make a film?” I think music does it better. This notion of trying to pin things down in terms of: “What is the story about, what are you doing?” It doesn't apply in music. In our films it's the same thing. You don't see the bird, you just hear the flap of the wings going off screen, or the shadow going across.
A[ndré] H[abib]: It's these little objects that encapsulate, in Schulzian terms, the “mystical consistency of matte”. These little insignificant objects have their own metaphysics.
Quays: We had another project around Schulz's Sanatorium. We wanted to integrate some of his treatises. But how do you do that without sounding pretentious? They're such great themes. And to think this was a guy working in a crappy little schoolhouse, teaching sewing and drawing to kids, living with his mom, desperate to have a vacation, and have more time to write.
(http://www.sensesofcinema.com/contents/01/19/quay.html)
[Damon Smith]: How much do you think that your commercial work of the past ten years has fed into your film shorts and features?
Timothy: It’s just the opposite. We’re hired to do commercials because of previous work. I don’t think there’s been any commercial [job] that’s informed us. The only thing that a couple of commercials did was allow us a bit of post-production work, digital post-production, which we got familiar [enough] with to know “Ah, we can do this.” Commercials have big budgets. Whereas usually, like on Street of Crocodiles (above), or any of our animation films, there’s never any budget for post-production. None, ever. You try to do as much as you can inside the camera.
[Damon Smith]: What is your scheme, then, for pushing yourselves ahead, creatively speaking?
Stephen: Ideally, what we’d like to do is Bruno Schulz’s novel Sanatorium. We don’t have grand schemes. It’s better that we be pushed into a corner. Our idea is to be pushed further and further into a corner where another kind of infinity opens up. I mean, to do In Absentia II would be great. We wanted to do it from the husband’s point of view, but nobody’s bitten. Every time we’ve had a project, like Benjamenta, it’s closed doors for us. Absentia closed doors for us. On Crocodiles, we got Peter Gabriel’s “Sledgehammer out” of it. Otherwise, basically, we don’t get any work.
(http://www.brightlightsfilm.com/55/quaysiv.htm)
Edit: Just noticed you already have it listed as a feature in the FCM database, Wetdog.
Do you know any more about this?