This is a fascinating thread, and I'd like to pick up the question of what happened to this workprint Welles worked on.
So other posters have established:
-Welles had a practically complete edit of Don Quixote
he cut with Mauro Bonanni in 1969-70. This print has 2 sets of markings, one by Welles (in code!) and one by Bonanni, recording the sequence.
-He sent Beatrice Welles to collect it in Rome in 1971.
-He appears to have received that copy - he told Rosenbaum at their 1972 lunch that he had practically completed it, implying he was in possession of it in some form.
-Jonathan Braun worked with Welles as an editor between c.1975 and 1982, and refers to their working on re-cutting this old workprint, with yellowing tape peeling off.
-In 1984 he was editing it again, and in the last 3-4 months of his life in 1985, he re-established contact with both Suzanne Cloutier and Mauro Bonnani, both of whom held (negative?) materials, lasting about 10 minutes and 30 minutes respectively.
So far, so good.
Then Welles dies, and mido505 suggests the following possibilities:
mido505 wrote:1. That the Bonanni/Beatrice workprint ended up in Spain when Oja donated all her available footage, was seen by Franco, and still resides somewhere in Spain.
2. That the Bonanni/Beatrice workprint ended up in Spain when Oja donated all her available footage, was seen by Franco, and then somehow ended up at the [Paris] Cinematheque.
3. That the Bonanni/Beatrice workprint somehow ended up in France after Welles’ death, and that Franco was working with other workprint materials.
4. That the Bonanni/Beatrice workprint is still MIA, and that both Franco and the Cinematheque received alternate materials. In that case, what exactly is the Cinematheque “workprint”?
Other posters have suggested the following as well:
5. That the Bonanni/Beatrice workprint ended up in Spain when Oja donated all her available footage, was seen by Franco, and was dismembered by him when making "his" version (which he saw as an interpretation). If so, the materials probably still survive.
6. That the Bonanni/Beatrice workprint ended up in the possession of Gary Graver, who apparently saw/worked on it in Welles's lifetime (he certainly did that small bit of second-unit photography in colour in 1972).
7. That the Bonanni/Beatrice workprint ended up in the possession of Beatrice Welles, and is held by her today.
In addition, I'd like to suggest the following:
8. That the Bonanni/Beatrice workprint was dismembered by Welles himself over the years, as he took out the best bits to integrate into a new documentary.
 and  are consistent with one another.
 is highly unlikely - not just because (as others have mentioned) GG is unlikely to have kept this a secret to his grave when he was screening Welles footage all over the place, but also because it would have surely surfaced after his death.
Regarding , it remains a (slim) possibility. Yes, Welles was working on DQ at his Los Angeles house (not Las Vegas) at the time of his death, and so Oja Kodar is far more likely to have had the print. But the fact remains that Oja Kodar never had a full workprint
(or if she had done so, Costa Gavras would never have just presented 35 minutes of jumpy-but-excellent material from "her" print, and Jesus Franco would never have needed to do as much editing as he did for the 1992 release). That puts  and  out of the question.
As others have mentioned, Oja was out of the country when Welles died, allowing Paola and/or Beatrice to take the print. What no-one's mentioned on this thread so far is that Paola Mori was in
the movie - so she may have had a sentimental attachment to this film, in a way she didn't about other Welles projects. Likewise, Beatrice had been slated to appear at one stage, so may have had a sentimental attachment to the project. If
(as some have speculated) Beatrice has the workprint, then the rights impasse, with Oja Kodar successfully holding all intellectual property of Welles's unfinished films - may be what's keeping her from doing something with the footage. If
there's a complete workprint, Beatrice has it.
But I think  is most likely. 15 years is an awfully long time to be tinkering with something, and as Welles's conception changed from Don Quixote in the modern age to a documentary on modern Spain clashing with the old Spain, he'd have needed to discard material. Welles's films were all designed to be under 2 hours, and the Bonanni/Beatrice print was 90-120 minutes, depending on the source. (It might have been both, at different times.)
My guess is that sometime in the late 1970s/early 1980s Welles discarded most of the film (including the Patty McCormack episodes, which had been in the Bonanni edit in 1970), leaving him with about 35 minutes of his favourite scenes, which he could insert as picaresque digressions/counterpoints in an essay-film on Spain, unfilmed at the time of his death. These scenes were tightly edited, and included about 10 minutes of the provisional voiceover he'd done c.1969-70. But they were self-contained episodes. Oja Kodar then inherited these fragments, and it's these which Costa Gavras pieced together for his 35 minute presentation in 1986.
I've never seen the 1986 presentation, but from the descriptions I've read, it looks like everything in it went into the Franco monstrosity, albeit with further editing. (When Quixote's in the cage, most of the scene was obviously cut by Welles, since it has his dubbing, but a few non-matching shots are spliced in by Franco, and during these the dubbing switches to someone else for a few sentences).
Conclusion? Depressingly, as Welles changed his conception of Don Quixote
, he must have junked at least two-thirds of the 1970 workprint (just as he had junked most of the reels of Don Quixote Goes to the Moon
that was mostly finished circa 1967, when he thought the concept became out of date with the moon landings - see Berthomé and Thomas on this.) What survived were fragments, which are almost all included in the Franco atrosity (albeit with some further editing), while Bonanni has at least some of the McCormack material from the 1970 edit, but even he's unsure he could ever reconstruct it all. Barring BW having been hoarding this for all these years, I think this one's gone for good.