I think a lot of bluegrass gospel lyrics are realy just old Baptist and Holiness hymns worked over into bluegrass arrangements. The melody is placed down in the upper baratone range and the tenor is sung a fifth higher as is common in bluegrass music.Of course many bluegrass gospel songs are composed by the bands that play them. A real working bluegass band will include at least two gospel songs on every album they cut and every third or fourth album will be completely gospel. This tradition is deeply embedded in the music since most bluegrass musicians first learned to sing in church and when families get together to sing, gospel songs and hymns are often the ones everyone knows.
Everyone seems to be drinking much less these days than many of us used to, but I remember at festivals years ago that when everyone got too drunk to play (around 3:00am) they'd repair to someone's camper and sing gospel songs for another hour or two. Great fun.
- Mark