Rutles records did somewhat better in the U.K.; the album entered the charts on April 15, 1978, and stayed for 10 weeks, hitting its peak at #12 on May 7, 1978. The single entered the charts the same day, staying for 4 weeks, and peaking at #39, dropping off the charts on May 27. A second single, "Let's Be Natural" b/w "Piggy in the Middle" was also released, but I find no evidence that it made the charts.
Despite the album's commercial failure, it was nominated for a Grammy Award for Best Comedy Recording (though it didn't win).
Sadly, ATV Music, the owners of the publishing rights to most of The Beatles songs at the time (not The Beatles, who don't own the publishing rights to their own songs, but that's another story for another site) didn't see the humor in the Rutles songs, and brought suit against Chappell and Co./Pendulum Music, the publisher of Neil Innes' songs, for copyright infringement. Although a strong argument could easily be made that The Rutles songs didn't violate ATV's copyright on The Beatles music, it would have required sending lawyers into court, filing papers, and other expensive activities. It seems Neil's publisher decided to take the easy path, and capitulated to ATV, giving them half ownership of all the Rutles songs that had been issued on the Warner Bros. album. This meant that ATV would share publishing with Chappell and Co./Pendulum Music. From that time on, all royalties would be split half and half between Neil Innes and ATV, and either Lennon/McCartney or Harrison would officially be listed as co-writers of the songs.
The Rutles album ended up being a big commercial disappointment. Warner Bros. Records let the album go out of print, and remaindered what inventory they had left. For months, cut-out bins across the US were well-stocked with copies of The Rutles booklet and its accompanying LP. For years, the standard joke among 8 Track collectors was that the most plentiful 8 Track tape out there was The Rutles.
It seemed that The Rutles would end up being nothing more than an easily overlooked footnote in the annals of comedy and music.