The way I understand it, the first Evil Dead movie had nothing to do with its sequels. Dead by Dawn essentialy started it over, flowing into Army of Darkness.
And I must say, Army of Darkness is my second most favorite movie, second only to The Crow.
I like what I'm hearing about using Ash in the next Freddy vs. Jason. It'll probably never happen, but imagine the possibilities. *** FREDDY VS. JASON SPOILER WARNING *** Jason is walking out of the lake carrying Freddy's (still alive) head. Suddenly, Jason feels drawn in a certian direction. Meanwhile, Ash is having a shootout with the Deadites that he brought back with him by messing up the last word (klatau, verata, nei*cough*) in the S-Mart (the end of the studio cut of Army of Darkness). Enter a new Deadite boss (the Dead take over the chick Ash was telling his story to, so the new Deadite boss is a hot babe that Ash will want to save rather than just kill). Then enter Jason, under the control of the Deadite boss. Somehow in the melee, Ash ends up with Freddy's head, and then ends up retreating. He goes back to the cabin to retreive the Necronomicon, only to discover that the place is full and surrounded by Deadites. As the movie goes on, Freddy ends up "helping" Ash, but eventualy turns out to have his own adgenda (of course). In the final battle, Freddy's head ends up merging with the Deadite boss. A portal opens just like at the end of Dead by Dawn, and all the bad guys get sucked into it. The portal is supossed to lead to Hell, which is where Freddy (now with his full body again) ends up. But Jason ends up getting sucked back to the 1300's that AoD took place in. Ash and the babe leave the cabin and go back into town. Upon arrival, they discover a wasteland like that seen at the end of the director's cut of AoD, the result of the unstoppable Jason having 700 years to destroy everything. As the camera zooms around and we see the look of shock on Ash's face, we also see that either he or the babe is holding the Necronomicon in their hands. Zoom in and roll credits.