GUEST, russ--If newgrass and contemporary county qualify, American mountain music definitely qualifies.
I'm 25 and I guess I've been a "folkie" all my life (my parents are "Folk Scare" era and were still very much interested in the music during the 1970's and 1980's when I was a kid). I played in a square dance band in college; an honest-to-God, all-acoustic, no-frills, Midwestern square dance band. The Midwest is the place to be for American dancing and music; we didn't get a LOT of young people, but there were some and there certainly are plenty of events.
Texas has a pretty good followings in the Cajun and Mexican traditions but it's "Anglo" component is weaker--most of the young people here are into some sort of country/rock fusion. A lot of it is great music, but it's not what you'd call "folk".