There are several good ideas already presented but let me reinforce a few. I have been attending a jam on Thursday nights for about ten years, which has been going on for over twenty years. Several years back it became politically necessary to start another and I created one at the local train station on Wednsday nights.

The walk-away best source for attracting new musicians to the jam are posters in the local (up to an hours drive) music stores. The store owners want to promote local jams as a way to sell or trade up new instruments. The Thursday night jam draws musicians from over two hours away, and the Wednsday night jam, an hour away.

And your area can't be that bereft of folk musicians. Just last week I was in Newport, PA which appears to be a couple of hours south of you, for the Mt. Laurel Autoharp Festival, and the place was crawling with folkies. (Incidently their resources list's first entry was the MudCat).

Festivals like that often have geographical lists of attendees, just for contacting to play music (not for solicitation). Common Ground is going on right now in Westminster, MD, near the PA border, and Augusta, at Elkins, WV is full swing.

Finally, you are right about the jam dying if all the attendees are beginners on their instruments. But scare up just one decent fiddler, and the game changes rapidly.

As for music, the Fiddle Fake Book, any of the Matheson Waltz books, and the Ruff Water jigs and reels book (include the Portland if you like) provide a common basis to begin to exchange tunes, or learn new ones. Bluegrass people tend to be stuck in one mode, 4/4 straight ahead, so I'm suprised at the "branching out" bit, but Old Time and Celtic are more malleable, and will generally go along with anything that's not rock. Good Luck!