A cursory glance at the works of artist Marc Chagall indeed reveals a palette of colors strongly resembling that of The Funhouse, as well as the recurring subjects of circuses and carnivals.
Courtesy of the excellent art collection website Olga's Gallery there is a collection of Marc Chagall paintings available to view online. JR and I have selected a smattering of works which struck that Funhouse chord with us, and which Hooper may have shared with production designer Mort Rabinowitz during preproduction of the film.
Bride With Blue Face
Bella in Mourillon
Les Trois Acrobates