Julie McNamara was a reporter on the Warrnambool Standard – well versed in local crime, court cases and sport – when she was sent out on an upsetting job 11 years ago.

Fishermen had discovered hundreds of dead birds on Middle Island just off the coast.

The next day, the story was splashed across the paper's front page: "MASSACRED – Foxes kill at least 360 penguins, muttonbirds", with a distressing photo of dead birds piled on the beach to be counted. The casualties included 180 penguins – half the island's population – and 183 muttonbirds.

"I remember just how upset community members were," McNamara says. "People had long loved the birds on that island and to see something like that really shook people up."

Reading the story gave knockabout local chicken farmer Swampy Marsh an idea. His Maremma Sheepdog named Oddball was great at protecting chickens from foxes. Maybe she could protect the island's penguins too.

While the plan proved controversial given that dogs were banned from the island, it worked. The foxes who had been wading to the island at low tide stayed away; the penguins thrived.

That story has inspired the Australian film, Oddball, a comic family tale starring Shane Jacobson as Marsh, Sarah Snook as his penguin conservationist daughter, a single mother with a nine-year-old daughter played by Coco Jack Gillies, Alan Tudyk​ as an American tourism expert and Deborah Mailman as the town's mayor.

It is directed by Stuart McDonald, best known for working with Chris Lilley on Summer Heights High, Ja'mie: Private School Girl and Jonah from Tonga.

The film carries the  tag "based on a true story" and, with certain inventions, that's what it is.

"We had the idea having morning tea on the chook farm," Marsh says. "The local paper was saying it's terrible what's happening to the penguins and there were pictures of dead penguins all over the front page.

"I said to Dave Williams, who was working for me at the time, 'I reckon the dogs could do this job'. He said 'yeah, I think you're right'.

"His father was a senior animal guy with the the Department of Sustainability at the time so we bounced the idea off him. He said it'll work but we've got the bureaucracy to fight. He helped us find a way through the bureaucratic maze that is state and local government."

Marsh says that virtually every farmer with free-range chickens has Maremmas.

"The way they work is they've got a very strong sense of territory," he says. "If you ever study wolf biology, there's still a lot of wolf in these Maremmas even though they're cute and fluffy.

"What makes them work has got nothing to do with bonding with the animals they're looking after. It's the fact they're dogs, it's their territory and if other dogs want to come into the territory, they want to know why.

"And a fox really only wants an easy feed – it doesn't want to put up a fight – so they're relatively easily discouraged."

Marsh says he felt for the penguins as soon as he read about the deaths.

"They're the little guys," he says. "We've got, what is it, 26,000 kilometres of coastline and all they wanted was a bit of peace and quiet at night. I thought that's not too much to ask."

But with the plan to use Maremmas never having been been tried anywhere, the authorities took some convincing before they approved it.

"The environmental officer at the city of Warrnambool at the time, I said to him, 'What about this for an idea?'" Marsh says. "He said, 'You can't do that: dogs are banned on the island.'

"True to my diplomatic skills, I said, 'Well, you'd better write a big bloody sign because the foxes can't read'. And that was the end of that negotiation.

"But luckily he resigned and moved on and a young fella that I knew from surfing days, Ian Fitzgibbon, took over the job. I knew Ian had a brain and I was able to talk to him. He decided to set up a committee and the rest is history."

Marsh says the film is "very, very true to what happened," though he admits there is the odd departure from his family circumstances.

"Well, I don't have a dead wife, I have an ex-wife," he says with a laugh. "That's one important factor that's different. The rest of it is based on the people who were involved and how we did things.

"But I've been telling people that it's a movie, not a documentary. If it was a documentary, Attenborough or somebody would be doing it."

As the film's title suggests, there is a question over who really is the oddball: the rambunctious dog who charges down the main street creating havoc or Marsh. But the man himself says the screen dog is an amalgam of all his Maremmas.

The real "Oddy" is far too polite to knock over people in the street and was highly disciplined when it came to protecting the penguins for the first time.

"She spent three weeks on the island by herself, which is pretty good because she'd never been separated from her little brother in her life," he says. "Then she swam back to shore and made her own way back to the farm. That's how independently minded these dogs are. Then we put Missy out, Oddball's aunty, and she stuck it out for three weeks."

The real Oddball, played by a young dog named Kai in the film, is still alive at 14 and living with Marsh's ex-wife.

Marsh was involved in script meetings and watched filming at times, particularly enjoying seeing his alter-ego eating raw eggs and having a cold outdoor shower in the mornings. And he admits that, yes, he is as eccentric as he appears on screen, as shown by recent newspaper articles about him defying authorities by selling raw unpasteurised milk to farmers markets and health food shops.

"I like to look at a problem and analyse it and find a solution," he says. "And quite often the solution is an invention. Quite often a conventional solution can be an expensive way to do things and I like to think outside the square.

"That's, I suppose, why I get labelled as an eccentric or a controversial person. So be it. I blame it on the fact that everyone else is really dull."

The Maremma plan worked so well that from an all-time low of six penguins on the island there are now roughly 200. And the dogs are still used during the peak nesting season in autumn, when the tides are so low the foxes can reach the island

Jacobson says part of the appeal of the story is that it is true. "It's not too often you get to do that," he says. "I got to do it with Beaconsfield [playing trapped miner Brant Webb] but things like Kenny aren't that real."

After spending time with Marsh, he aimed to capture the essence of his colourful character.

"I wanted to make Swampy a character that kids and the masses would like," he says. "I do find him a little bit Santa-like. So I wanted that big, open-faced friendliness.

"But I certainly look like him. They did a great job with make-up and wardrobe."

While they share a similar substantial physique, Jacobson had his hair permed and coloured and grew his beard for the role.

"It had my kids quite terrified when I came home with a perm," he says. "It's certainly a look. But a look doesn't mean it's a good one."

He had to steer clear of Marsh's trademark overalls to avoid looking like his famous plumber from the hit 2006 comedy, Kenny.

Jacobson says the film took the odd liberty when it came to characters to suit the storytelling.

"Swampy has a couple of daughters. In the film, we've just made it one daughter.

"And a few characters we've introduced to round the story off. But all the important stuff – the penguins and the Maremma dog – all that's true. He revolutionised the conservation practice of penguins all over the world."

Jacobson thinks of Oddball as a modern-day Storm Boy, an Australian family film with heart.

"I love the fact the story lives on past the credits because every day these dogs continue to do this thing."

The real Swampy Marsh is impressed with Jacobson's portrayal.

"Mate, he's the only actor in Australia that can fill my overalls," he says with a laugh. "He really is."

Oddball is screening now.