I guess it comes down to determining if this is legitimately a derivative work or not. I'm not sure that works about a work can really be considered derivative in that sense.
Yeah, that's the sense I get too. And SVA may have a legitimate case that his work isn't derivative; I just don't think he does.

But you'll notice that the definition you pasted here is not the one you gave above.
::peering at them more closely::
Yeah, there's a few differences. The first one is a general interpretation of case law re. what the courts have to say about violating/not violating copyright. The second is the definition of what is copyright, which is what a judge looks at when they decide whether somebody has violated it or not.