I saw both "Dancing Outlaw" and "Jesco Goes to Hollywood" on tape several years ago. I don't think the tapes are guilty of "caricaturing hillbillies" at all. Jesco is a crazy whacked out drug addict who'll do anything to get high (including sniffing gasoline) and who also happens to have a totally disfunctional family whose members like to spin donuts in their front yards until they blow up the engines in their cars. Hell, I have neighbors just like that and I live in Florida! They're everywhere! The producer/director just happened to find the particular one he wanted to make a documentary about in West Virginia.
By the way, just so we can call this a music thread, in "Jesco Goes to Hollywood", Jesco dances while Dweezil Zappa plays guitar.