I'm sure there are other threads about this subject too, as I remember posting to one of them!!
I'm definitely a Charles de Lint fan (he's got 50 books out now!) and his website contains his newsletters which also talk of the music he's currently listening to and recommends. Very interesting!
Anne Rice (she of those great vampire chronicles) did "Cry to Heaven" - about the lives of 18th century castrated male sporanos in Italy.
There are other authors beside Sharyn McCrumb who have written novels around The Big Ballads too - I haven't read them but maybe they could be found on The Net via the sites of Charles Vess and GreenmanPress or Terri Windling e.g. (oh, Pamela Dean did an updated version of Tam-Lin, that I read ...)
There's also Brian Keenan's "Turlough", centred around the blind harper in Ireland ...
And Phil Rickman gets into the darker side of folklore and customs too, in many of his novels ...