From memory I think the book is "L'avalee des avales" by the Canadian author Rejean Ducharme, but I don't know what it's about.

The impression I get from Leolo is that most of the film's artiness is superficial - I can't believe that the book has too much significance, because I think that Lauzon wanted to be deliberately obscure, trying too hard to make a film which fitted into the Arthouse bracket.