Lindsay spent Friday night at a pal's house in Venice and she continued the party there yesterday after running home to change clothes and return to her friend's beach bungalow.

Lohan was in good spirits, says our photographer: "Lindsay was on cloud nine -- I'm not sure what she was so happy about but she looked great. Maybe the more low-key, if she's not drinking and doing other stuff, are having a positive effect on her!"

Lookin' good, Linds!