May as well give this one a bump. The Brothel in Rosenstrasse is actually one of the von Bek books, though its more of a contemporary novel than a fantasy or sf piece. The narrator, Rickhart von Bek, is one of the most disreputable of the family -- a family which seems to excel in producing fringe types to begin with -- and yet the themes in the novel are very much those running throughout Moorcock's other work; only here he plays it out with a slightly different approach. Here the sexual escapades in the brothel echo the state of Moravia's health as a political unit; and as the sexual fantasies become increasingly bizarre and distanced from the realities, so the chaos in the state increases, until finally both collapse in a brutal and cruel fashion. The theme here seems to be that when we try to not only create fantasies and use them to enrich our lives, but to make them our lives, then we distort the reality around us until we lose our own humanity in the process. That, at least, is one of the major themes (there are others, as there usually are in Moorcock's better work).
And yes, I'd claim this is certainly one of his better works; the maturity and deftness of his craftsmanship here is quiet, understated, and very carefully orchestrated rather than given to the pyrotechnic writing of much of his fantasy and even the Cornelius books (which spanned much more than the psychedelic era: the first was written ca. 1965, the most recent in 2001; Jerry, like Elric, has grown with Mike's career). It's by no means for everyone, but it shows his ability to handle very difficult themes without becoming sensationalist, and his characters are richly textured, as is the writing itself. It's a difficult book in some ways. Moorcock doesn't stand still or write the same thing (even within a series, the approach and the writing varies widely depending on what he intends with the book), but his themes are large and sprawling because he's dealing with life in all its variety; I think that's a good thing for any writer to aspire to. If you're looking for obvious fantasy, then this is not the book for you; if you're looking to see a great craftsman at work in a different vein, give this one a try.