Can Appropriation Artist Claim Copyright Over Artwork Appropriated From The Same Original?

Techdirt: Here's a fun one found via Boing Boing. It involves a band, named Elsinore, that is about to put out an album and has run into a rather bizarre copyright issue that highlights some of the insanity in today's copyright law. For the cover of the album, they used a painting done in an art class by a friend of the band named Brittany Pyle.