The Vermillion Lies story continues to unfold.

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With the release of their new CD, Separated By Birth, the Boekbinder sisters prove that their songwriting abilities have possibly surpassed their impressively enhanced ability as performers. The superb 16-song album is divided into two acts, with the first leaning towards rootsy singer/songwriter material, while the second is full of surreal circus imagery and innovative instrumentation reminiscent of Tom Waits.

It starts with “I Should Fly,” a song about getting a different perspective on a frustrating world. Over the fluttering of a mandolin, Zoe sings in a world-weary voice that: “From up in the sky/ they are just people/ but from here/ they are liars, cheaters and thieves.” Then, Kim joins her sister on a big, catchy chorus that lifts the number up.

Lyrically, the whole album is strong, from the beautifully over-the-top theatrics of “Circus Fish” to the quietly devastating ballad “Louder,” which is full of great little details, like how a box of ice cream in the freezer triggers memories of a lost love. It’s impossible not to be completely drawn into the piano ballad “Bad Man” after lines like: “I met this funny girl alone on a bridge/ I threw her to the fish and made my wish/ yeah, I’m a bad man.”

Musically, Separated By Birth is extremely varied. There’s the brisk folk country number “Shady,” the pop balladry of “Middleground,” the Sgt. Peppers carnival sound of “Circus Apocalypse” and, maybe most impressive of all, the ‘20s jazz of “No Good.” The song features the clicking sound of a typewriter—one of many found instruments used on the album, along with a gas can, a flour sifter and a barbecue grill—before morphing into a nod to Billie Holiday, aided by a trumpet that sounds like a whistling teakettle. Another notable number is “Shark Serenade,” a song sung from the point of view of the legendary marine predator accompanied by the teethy clink of a toy piano.

Though all the songs were written by the Boekbinder sisters, Separated By Birth features contributions from a strong cast of musicians from Vermillion Lies’ new hometown of Oakland. Myles Boisen—who recorded the album and played guitar, bass and lap steel on the release—played on the Tom Waits discs Alice and Blood Money, while violinist Carla Kihlstedt has contributed to Tom Waits and Tracy Chapman CDs and currently is a member of the Tin Hat Trio and Sleepytime Gorilla Museum.

Kim Boekbinder believes that the presence of so many great players pushed her and her sister in the studio. “We were being inspired by the fact that we were so challenged,” she says.

Now, the band is gearing up for a West Coast tour this September and their own Twisted Folk Festival, which will feature six acts including DeatHat and The Peculiar Pretzelmen, Aug. 25 at the Henry Miller Library. But, before all of that, Vermillion Lies play a carnival-burlesque-themed CD release party at Monterey Live, with dancers.

VERMILLION LIES play Monterey Live, 414 Alvarado St. in Monterey, Friday at 7:30pm. $7/advance; $10/at the door. 375-5483.