I think Day would be doable if you boiled the story right down to the set-pieces, and reduce the amount of dialogue. There are some things in that movie that would be a lot of fun (and a cool challenge) to do with puppets - puppet vivisection, puppet amputation and cauterization, puppet Bub, puppet fight in the caves, puppet profanity-laden tirades, etc. - but as you've said, the biggest problem is not that the story can't be pared back to the action elements but instead lies with the lack of audience familiarity. Not only that, but there are just as many (if not more) financial/legal thumbs in the pie with Day as there are with Dawn.