A copy of a post my partner Corwen made to another forum answering the same question:

British:
Well you know Damh the Bard...http://www.paganmusic.co.uk/
The Dolmen: http://www.thedolmen.com/band.htm (lovely folk who host great camps)
Druidspear http://profile.myspace.com/index.cfm?fuseaction=user.viewprofile&friendID=88047252 (Don't know if these guys are still going)
Dragonsfly: http://www.dragonsfly.org/ (Celtic/eastern folk with the odd pagan song. Nice)
Spacegoats: http://www.pondlifestudios.com/artist_information.asp?id=1 (Not going any more but luckily their fantastic music is still available from Pondlife)
Jabberwocky: Andy Letcher's project with Krismael of Spacegoats. No website and the band only made one album, called Mimir, buy it if you see it! Funky Pagan music with hammer dulcimer and bagpipes.
Andy is still active, currently in a project with my partner Kate's brother Colin and his wife Jane, called Telling the Bees http://profile.myspace.com/index.cfm?fuseaction=user.viewprofile&friendID=136179322 Don't know how 'Out' pagan it is but I'm sure they are worth watching.
Heathens All who were an out Pagan band became Seize the Day (more political, but worth listening to.)http://www.seizetheday.org/ (I'm hoping they will re-release the Heathens All stuff as none of my old tapes work!)
Silver on the Tree: http://glastonburymusic.org.uk/sott/ (the first Pagan music I heard. Eye of the Aeon and Mystic Spiral are classic Pagan albums)
Paul Mitchell:http://www.myspace.com/pagansatire http://paul.makingithappen.co.uk/ (wonderful satirical songs about Paganism from a really great bloke.)
Paul is in a new band Mad Magdelin http://profile.myspace.com/index.cfm?fuseaction=user.viewprofile&friendid=275337903
Paul Newman but his website seems to be down.
Last but definitely not least, the wonderful Carolyn Hillier and her partner Nigel Shaw. http://www.seventhwavemusic.co.uk/ (they play apart and together, beautiful shamanic pagan music, and run a really nice festival every other year at their home on Dartmoor)

And of course if you are desperate theres always Kate and I...
We play as a duo called Rigantona:
http://www.rigantona.co.uk
but Kate also has a CD of her own called Kate Fletcher, Fruit which received good reviews in Pagan Dawn, Sacred Hoop, TDN and the folk press: http://www.katefletcher.co.uk

A lot of North European music has really Pagan or Shamanic elements, try

Scandinavian/Finnish:
Gjallahorn:http://www.gjallarhorn.com/main.html (fantastic Swedish 'New Folk' band)
Garmana:http://www.noside.com/Catalog/CatalogArtist_01.asp?Action=Get&Artist_ID=14 (driving moody Hurdy Gurdy, big percussion with lovely female vocals)
Hedningarna: http://www.noside.com/hedningarnabio.html (techno with joiking, singing and lots of ancient instruments)
Korpiklaani: http://www.korpiklaani.com/ (Finnish Pagan Heavy Metal)

Germanic:
Schelmish:http://www.schelmishuk.co.uk/ (Bagpipes and big drums)
Omnia: http://www.omnia-neocelt.com/ (Dutch I think? Upbeat pagan music)
Faun http://www.faune.de/web2007/index.html (have heard of these guys but haven't heard their stuff yet)

Saami:
Wimme Saari: http://www.noside.com/bio_wimme.html (Joiking [shamanic singing] with a really dark voice and beautiful jazz folk accompaniment)
Marie Boine: http://www.mariboine.no/ (most famous joik artist)
Ulla Pirrtijarrvi (my favourite but I can't find a web presence.)

Russian:
have just discovered Ivan Kupala, they are like a Russian version of Enigma, slightly dated Euro-techno with Slavic folk instruments and old Karelian (Russian Finnish) ladies singing, which sounds kind of Saami/Native American. Completely wonderful, and oddly compelling. Just found some videos on You Tube and I like the band even more now. Great to see pop videos full of old ladies.
http://youtube.com/watch?v=E_0j_38Tda0 (beautiful)
http://youtube.com/watch?v=GnqWC9T-T1c (moving)
http://youtube.com/watch?v=aa49gyJZYb4 (funny)

Plus USAnia
Reclaiming http://www.reclaiming.org/ (Political Feminist Paganism, 4 chant CDs to date)
There are a lot of Usanian artists I don't really know judging by this CD: http://www.amazon.com/Best-Pagan-Song/dp/B0001RZGC4
and lots more producing music that might be categorised by some as Pagan, like Jennifer Berezan http://www.edgeofwonder.com/biography.html and some who are definitely Pagan but whether what they produce counts as music...http://www.neopagan.net/ (Isaac Bonewitz)