JBroadway said: "Fun question! I've actually thought about this question before, but I had no idea Hello Dolly was part of such a long daisy chain, and I don't think I can top that, or even match it.
One that I found particularly amusing was Bat Out of Hell. Steinman wrote a musical in the 70s that was a loose retelling of Peter Pan. The musical was then loosely adapted into a series of albums, which were then loosely adapted into the musical. So I like to say that Bat Out of Hell was "a loose adaptation of a loose adaptation of a loose adaptation of Peter Pan." It was fun to see the show and track those degrees of separation, because there are still some Peter Pan elements remaining.
In terms of your standard modern Broadway musical track, the longest we usually see is probably "real life --> book --> movie --> musical." Catch Me If You Can fits the bill there, and I'm sure there are others.
Some of the shows based on Shakespeare's work might reveal some significant daisy chains if you dig back deep enough into the scholarly, historical stuff. A lot of his plays were based on old stories which would've had their own daisy-chains of re-tellings going back quite a ways."
My knowledge of Steinman is so tangential (I know Bat Out of Hell because of Meat Loaf because of Rocky Horror), I had NO idea Bat Out of Hell started out as a retelling of Peter Pan. Thinking of that, and seeing the album cover image in my head, is very amusing. Thanks!