Richd, I love your definition of a living tradition - it's one of the best and most succinct that I've come across.
Certainly Calon Lan seems to be part of the musical DNA in West Wales; our local hunt closes its pub sessions with a spine-tingling rendition. Hearing it sung like that is like hearing the Holmfirth Anthem, the Cadgewith Anthem or the Sheffield carols sung in their proper homes. That's real folk music, and it's powerful stuff.
I also agree with richd and Sian on the straitjackets imposed by the Eisteddfodiau; our youngster is currently traipsing around Ceredigion doing his dancing in various competitions, and if it's remotely traditional, I'm a Dutchman. The same for the singing. I have a friend and neighbour who won a chair in the national for his singing, and he's purely an 'art' singer. He knows some traditional songs, but only as arranged and not as collected. I see it as my mission to 'corrupt' him - which given his capacity for Felinfoel, might yet bankrupt me!