CountessRichard:

Maybe he assembled a set of verses he thought worked best together, but I can't imagine a need to "reconstruct" the verses, since they'd already been collected many times by the 60s. Usually he'll mention it in the liner notes if he's made alterations to a song, but he didn't do that in his notes on "Martin Carthy." For me, that's enough evidence to make it seem unlikely that any work was needed on the lyrics, but I've been wrong before and will be again.

I really think "Boots of Spanish Leather" differs sufficiently to be considered a new melody. The guitar part he uses is still very similar to Carthy's, and "Girl" is almost identical to "Boots" in that respect, but I think the most important distinguishing characteristics of the "Scarborough Fair" tune are missing from both of the other songs. It seems to me that most of the similarities you might perceive come from it having almost the same chord progression and a similar overall contour. You could make a similar argument that Paul Simon's "Kathy's Song" is a variation on Martin Carthy's "Lord Franklin," really--the chord progression is close and so is the melody. But they're different songs, and again, it seems like a stretch to call "Kathy's Song" a variation on "Lord Franklin."

I read somewhere that he was actually pleased by Dylan's rewrite of the song, because he made a new song out of the material (like he did with "Lord Franklin"), rather than ripping it off completely like Paul Simon did. At least Carthy and Simon made up over it.