When I was a kid, this and Mewtwo Strikes Back were the only films I saw, and I preferred this one. Years later, it's still my favorite, and after going through all the movies, I'd argue that this is also the best one.
Exhibit A for that argument: it has the best script IMO. Films like Mewtwo Strikes Back or Spell of the Unown may have been more ambitious and gutsy in the themes they tried to tackle, and Lucario dared to have a bittersweet ending; while Revelation Lugia's theme of balance between nature and humanity is a good one, it's fairly common in animation, and the "imbalance threatens the whole world" plot is rather basic and oft-used. But it's very well-done here, a great example of a simple idea done right in a way that doesn't condescend or fail to try just because it's "for kids." It's extremely well-paced, the only one of these movies I can say that about, and devoid of any unwelcome padding or waffling.
There is one serious weakness in the story: the lack of consequences for for Lawrence III. But that's less glaring than it might have been. If you take Lawrence III as the primary antagonist, then this movie stands as a huge exception to the “a story is only as good as its villain” rule, ‘cause there isn’t a whole lot to Lawrence. Hes a cliche rich snob - too much money, too much leisure time, not enough regard for nature. And he decides to just go and trek it to the Orange Islands in his gaudy, glorified blimp, pick him up some trophies of Legendaries, and all the while stay completely oblivious to the consequences of his actions. He’s barely in the movie, too - really, outside his brief chat with the gang, he’s only on-screen when bagging or trying to bag a bird. He’s is so chill that he has hardly any reaction to his plans failing, and suffers no repercussions for almost ending the world. All and all, I’d say that adds up to a pretty weak antagonist.
Except that I don’t consider Lawrence III the real antagonist of the story - he’s the catalyst. The real antagonists are the discord between the Bird Trio and resulting imbalance of nature. Lawrence’s only real function is to set these forces in motion, which he does. The lack of consequences is still one of the biggest flaws in the plot, but for what he was, I think Lawrence was used effectively, and his limited personality and actions don’t take away from the film save for that one point on consequences.
The aesthetic qualities of Lugia are superb as well. The art direction is crisp, with a well-controlled color palette emphasizing the icy conditions of the islands. The staging of action is on a scale beyond a run-of-the-mill episode and gives the movie an epic quality and appropriately cinematic scope. But of all the creative elements, the score is the real star. Lugia is the only one of these movies where I felt that the music not only did a wonderful job supporting the story, but was worth listening to as a soundtrack in its own right. I have to say that I prefer the American score and its theme for Lugia, but the original is fantastic too, and it's quite the disappointment that the music in later films never measured up to this high standard.
But the thing that really does it for me in Lugia is the character work. Let's start with the CotDs. So many of these movies have thinly-drawn CotDs that leave no lasting imprint even as they serve as de facto protagonists, undermining any credible role for Ash and friends; or else, they're just there to consume oxygen. Melody avoids all those pitfalls. She's an entertaining and colorful personality who has a key role in the plot, but she doesn't dominate the plot, or take away the protagonist's role from Ash. The talking Slowking is a memorable face as well, and delightfully off-beat in the way he handles all the chaos around him. Lugia as the featured Legendary, and the three birds, are handled in a way that plays up their mythic qualities and gives them a power and a scale that later films often failed to match. Including Professor Oak and Mrs. Ketchum was an excellent touch, not because they had a lot to do, but because they served to illustrate how the events of the movie impacted the world outside the immediate location of Ash and his friends.
I've said before that I think the staff erred in keeping the TRio past Johto, and this movie is one of the reasons why. It's their finest hour, and I don't mean that in a condescending way. A few of the later films gave them a role in the plot, but never as big as they got here, and never as well-integrated with the rest of the cast or the theme of the movie. It's the one time that Takeshi Shudo came close to telling the story of the TRio realizing they really were good people, and it's wonderfully handled. I say that this helps underline why they should've been the ones to leave after the OS because, when their finest hour is them stepping up as true allies to Ash, it goes a long way toward showing how inadequate they are as permanent series antagonists.
And now we come to the main cast. I was shocked when I went through all the pokefilms to see just how rare it was for the travelling companions to get anything meaningful to do. After this film, only two of them ever gave a proper story arc to a companion, and only a handful more gave them something significant to do. So in a way, it's as disappointing as their failure to ever top Lugia's score that Misty's arc in this film remains the best any of Ash's friends have gotten. True, that arc concerns how she feels about Ash, a rather cliche plot to give a female character. But, as with the larger plot, it's well-written. Misty's chemistry with Melody as a pseudo-rival, which could easily have been grating (and probably would have been in a Western cartoon from that time), is restrained and charming. And I would argue that this film sees Misty grow as a character. She goes from (unconvincingly) claiming that she doesn't like Ash at the beginning to (indirectly) acknowledging that they do have a close relationship at the end. That makes this the only movie I can say advanced a travelling companion's character, and it's extremely irritating that the show proper never followed up on this.
Lugia also sees Ash grow as a character, something I can only honestly say about one other. To have ever-optimistic, supremely confident Ash be saddled with the fate of the world and not feel capable of meeting the task was great, as was seeing him rise to the occasion on a more mature and somber manner than might be expected out of OS Ash. Though I will say that I prefer the wording of the prophecy in the original Japanese, where things were more open and it was something of a coincidence that it referred to Ash at all.
The one character who doesn't get the star treatment this time around is Tracey. Like Brock so many times after this, poor Tracey basically stands on the sidelines and watches other people do things. Unlike Brock, Tracey was never a well-fleshed-out character, so I don't feel so irked by it. (And to those who've complained that 4Kids cut Tracey's "big scene..." the guy gave an unneeded explanation for why an explosion went off. Frankly, I don't blame 4Kids for cutting it; it was the closest thing to padding in the movie, and taking it out picked up the pace of the scene.)
A part of me is a bit saddened that this remains the best of these movies; they have had eighteen tries to top it, after all. On the other hand, this is a pretty sweet flick, and one of two pokefilms I wouldn't hesitate to recommend to someone who wasn't a fan. I love it!