The town in "Dagon" is named Imboca, which apparently translates as In Mouth. I think Gordon just picked the name Dagon because its a bit snappier. After all, Dagon the story is about two pages long and basically involves a man jumping ship, getting lost, then wandering around the raised seabed a bit until he finds a maddening monolith and glimpses a fishy beast. Theres not a lot there to make a full length film out of.
Sadly, the best lovecraftian films are often only vaguely based on his stories.
In The Mouth of Madness is great, but is actually a subtle in-joke by John Carpenter about his good friend Stephen King, rather than a tribute to Lovecraft. King himself has written several shorts with a Lovecraftian feel, at least one of which appeared in the TV series "Nightmares and Dreamscapes."
I believe "Dreams in the Witch House" was filmed as part of the Masters of Horror Season quite recently.
As far as films are concerned, Stuart Gordon seems to do the most accurate versions, albeit on the cheap, with a tendency towards gore. Mostly Lovecraft films are entertainingly cheesy.. you really do have to watch Alien to get the sense of brooding menace and interstellar madness that Lovecraft espoused. The Thing is also very similar to "At The Mountains Of Madness" in theme, which perhaps explains why it hasnt really been picked up on. Hellboy had a few Cthulhuesque moments as well, with its elder gods and "hounds of tindalos"ish creatures.
I wait, with baited breath, for the Nameless Horrors of the Holy Wood to boil up from that nether dimension on a thousand goated feet and dispense a well made, decent, high budget version of a Lovecraft story. I want to see some non-euclidean cyclopean masonry and some tentacles dammit.
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"There is a time when the operation of the machine becomes so odious, makes you so sick at heart,
that you can't take part" [Mario Savo, 1964]