The reason for the delay
There was a Q&A with director John Scheinfeld and producer David Leaf after the screening I was at in Santa Monica over the weekend of this wonderful film.
The reason for the 3-4 year hold up was Sony Music.
According to the director, the story is that the filmmakers couldn't make an affordable deal for the use of about 50 or so Nilsson songs that Sony owns that were used in the film. (Even still, apparently the doc could still be allowed to be shown non-commercially at film festivals.)
Eventually after several years, last fall a new management team came in at Sony Music, and saw the value of the doc for promoting Nilsson's music and using it to help market the catalog. And they gave the filmmakers the music rights FOR FREE! And allowed them access into their archives with master recordings, unreleased stuff, etc.
So now the film is playing in this small commercial release, and then coming out on DVD in a month.
All's well that ends well I guess, despite the long delay.