To what extent compound words are appropriate in English? Are the "onthedownburninghouseresting", "firesurrounded" valid words in English?
Somehow I feel that the first one is not, while the second one could be valid. What is the rule?
PS. I am referring to words without hyphen. Is usage of these words without hyphen acceptable?
I would distinguish between "words whose meaning a literate English speaker of normal competence can understand with a reasonable amount of effort" and "words that a literate English speaker will recognize at once as standard-form words."
Such a person, presented with a phrase such as "the fire-surrounded house" or "the house, fire surrounded" will immediately recognize the component words and fairly quickly work out the intended sense of the phrase. Presented with "the firesurrounded house" or "the house, firesurrounded," the reader may pause a bit longer (unless the writer has already been using such closed compound forms earlier in the writing, in which case the reader may already have made the necessary internal adjustment to manage those forms), but the meaning is still there for the taking.
But "onthedownburninghouseresting" takes the reader several giant steps toward late James Joyce territory, where deciphering is slow and difficult and not always rewarded at the end with a meaningful result (to say nothing of a result that coincides with the author's intended meaning)—and at the next step you get "cellelleneteutoslavzendlatinsoundscript" and you're all the way there—du côté de chez Finnegan.
To what extent is such aggressive closed-compounding appropriate? The answer depends on the relationship you want with your readers. If you are a litterateur writing for a (self-selected) small group of enthusiasts, you can probably get away with anything. But the broader your prospective audience is and the less avant-garde their tastes are, the more successful you will be if you abide by standard (that is, widely accepted) forms. In this regard, neither "onthedownburninghouseresting" nor "firesurrounded" passes muster.
Ultimately, it's less a matter of comprehensibility than of expectation and (following the frustration thereof) annoyance. You get to choose the style you use, but you'll pay a high price for choosing one that your readers interpret as unduly self-indulgent, precious, or hoity-toity.
