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Pet Sounds, according to numerous interviews with Paul, was the inspiration for Sgt. Pepper. It came out a year before Pepper.
Many were knocked out by Brian Wilson's Pet Sounds at the time, itself a conceptual break through album of emotional content.
As to Sgt. Pepper, and this general topic of overhype, I can't disagree more. Far from overhyped, it is still a pleasure to listen to. Deals with a lot of interior content, even of the fictional characters. That's not cold, that's human. Plus early psychedelic spirituals like "Within You Without You".
A breakthrough production, prehistoric technical wizardry, it was a new way for rock and classical.
AN' I like it, like it, yes, I do!