A microscopic theory applicable to simple classical fluids, particularly in the hydrodynamic regime, is presented. A simple isomorphic transformation of the space of one-body additive phase-space functions is considered whose distinguishing feature is that the total energy density is contained in the new space. A projection operator formalism for this subspace has certain desirable properties for the study of the hydrodynamic regime. It is shown that, for a broad class of approximations, one obtains a prediction for the VanHove structure factor S(k, ω) that has the correct hydrodynamic structure and in which the only quantities that are approximated are the dissipative transport coefficients; all thermodynamic quantities appearing in the expression are rendered exactly. In particular, a weak coupling approximation is made on the memory function, and results are compared with the analogous theory of Forster and Martin. Agreement is found for the dissipative transport coefficients to lowest nontrivial order in the coupling. On the other hand, thermodynamic quantities are accurately predicted only to second order by Forster and Martin, whereas in the present theory they are exact.