The Gray and Wyner lossy source coding for a simple network for sources that generate a tuple of jointly Gaussian random variables (RVs) $X_1 : Ω\rightarrow {\mathbb R}^{p_1}$ and $X_2 : Ω\rightarrow {\mathbb R}^{p_2}$, with respect to square-error distortion at the two decoders is re-examined using (1) Hotelling's geometric approach of Gaussian RVs-the canonical variable form, and (2) van Putten's and van Schuppen's parametrization of joint distributions ${\bf P}_{X_1, X_2, W}$ by Gaussian RVs $W : Ω\rightarrow {\mathbb R}^n $ which make $(X_1,X_2)$ conditionally independent, and the weak stochastic realization of $(X_1, X_2)$. Item (2) is used to parametrize the lossy rate region of the Gray and Wyner source coding problem for joint decoding with mean-square error distortions ${\bf E}\big\{||X_i-\hat{X}_i||_{{\mathbb R}^{p_i}}^2 \big\}\leq Δ_i \in [0,\infty], i=1,2$, by the covariance matrix of RV $W$. From this then follows Wyner's common information $C_W(X_1,X_2)$ (information definition) is achieved by $W$ with identity covariance matrix, while a formula for Wyner's lossy common information (operational definition) is derived, given by $C_{WL}(X_1,X_2)=C_W(X_1,X_2) = \frac{1}{2} \sum_{j=1}^n \ln \left( \frac{1+d_j}{1-d_j} \right),$ for the distortion region $ 0\leq Δ_1 \leq \sum_{j=1}^n(1-d_j)$, $0\leq Δ_2 \leq \sum_{j=1}^n(1-d_j)$, and where $1 > d_1 \geq d_2 \geq \ldots \geq d_n>0$ in $(0,1)$ are {\em the canonical correlation coefficients} computed from the canonical variable form of the tuple $(X_1, X_2)$. The methods are of fundamental importance to other problems of multi-user communication, where conditional independence is imposed as a constraint.