Just to come at this from a different angle, let's assume (as I firmly believe) that using existing melodies is an essential part of the folk process. My question is can anyone identify a song that Dylan rewrote that's any better than the one he got it from?

DYlan was and is a consummate success as a pop singer. He's written a couple of very fine songs, some not-too-bad ones and a lot of garbage--a pretty fair batting average for any songwriter. In several cases (Blowin' in the Wind and Don't Think Twice for example) he's done enough re-writing of the source melody to earn a valid copyright (IMO).

He hasn't had much to do with folk or trad. music in a long, long time.