I watched SHUTTER ISLAND last night.
For the most part, I enjoyed it, but like so many of Scorsese's movies (e.g. GANGS OF NEW YORK, THE AVIATOR), it could have easily lost 20-30 minutes.
Indeed, shorter it could have been a "classic".
I've now seen SHUTTER ISLAND four times, and had read the book quite a while before I saw it, and I must say that it is quickly becoming a favorite Scorsese film with added viewings.
When I first saw it, I felt the same way as you did, that twenty minutes could have been cut, but then, on second viewing, I couldn't think of where I would begin to start cutting. The end credits alone run TEN MINUTES!
Every bit of information that a viewer needs is dealt out within the film's running time; multiple viewings reveal the many layers of the performances and hint at what is really going on. For example, I wasn't fond of Mark Ruffalo's performance the first time I saw the movie in the theaters, but, subsequent viewings have revealed wonderful moments such as his fumbling with his holster, and the repetition of "You alright, Boss?" complete a dynamic established in Dennis Lehane's source novel. Robin Bartlet's short interrogation scene is another one with many layers (as well as the deliberate water glass sequence).
Where would you start to edit the film down? I'm very curious since I admire this movie more and more the more I think about it.
Also, I think it's closing line, which I will not repeat here as I think it could be a spoiler, is one of the true American classic final film lines.