My approach to this is basically: Collect every version of the song/story you can find. Research anything that doesn't make sense or is ambiguous. Then build up the most complete version you can from the various sources you've gathered. Cut out any "padding". Translate the whole thing to modern english (ie, audience accessibility - I find I do a lot of translations of scots/english stuff) but try to use the same word root if possible - Change only what is necessary. Make sure it (more or less) rhymes/scans in keeping with the rest of the piece. Finally, assess whether the end result sounds "of a type" with your other songs. Revise and re-revise.

Then there's the small matter of learning the song - REALLY learning it, sussing out the accompaniment (optional) and finally, polishing up the performance. Then you gig it for a year and finally, you record it.

It's a very involved process, you kind of have to commit to these songs. We've all heard ballads done badly, and it's excruciating as some of these songs take a quarter of an hour to sing. With enough commitment they kind of take on a life of their own though, and it's worth the hard work.

Good luck!

Cheers,
Jon