I like singing ballads a WHOLE bunch. I frequently do to them what I do to recipes when I'm cooking - I look up or listen to all the versions I can find of the same story (or recipe) and mix the ingredients (or verses) that appeal to me the most. What comes out maybe isn't Authentic Cuban picadillo or a completely "traditional" version of Hind Horn (meaning I didn't sing "Version 8.0.2" exactly the way it was printed in Child after being collected by Motherwell from Buchan's book of someone's vague memory of a shepherd's rendition in 1732, complete with missing words and leaving out the verse about the bridegroom coming down to find his bride's gone away with the beggar), but I keep the storyline intact, and pick a version of the tune within my range (using the ingredients I have available), and go check the local ethnic grocery store for the right spices (and the library for traditional versions to cobble together). IMHO, the end results are pretty good, even if they're not completely traditional - but then, I'm not Cuban, and I'm not learning my songs from my mother's knee.

I tend to agree with Barry, though - whether you're doing a traditional or recently written song, try not to change its spirit. If the message of "Prince Heathen" really disturbs you, it's better not to sing it than to distort it to something it isn't. If there's different traditional versions of a song that have different endings, like "The Golden Vanity", I'll pick the storyline I like best, sometimes add in verses from other versions, and then use the tune that fits the words and my vocal range the best. Purist snobs (some of them are my best friends) may disapprove, but I feel I'm keeping alive a story, and enjoying myself while I do it!