Jim: "Blogward describes a strange situation of reading from a large sheet of paper so he can can 'keep eye contact with the audience' - sorry, that one lost me altogether."
It's really not that hard. Kind of like keeping your eye on the road when driving yet glancing from time to time in the rear-view mirror.

Just as a skilled speaker or TV journalist use a monitor without it being obvious to the audience, it's possible to use a large-print lyric sheet very unobtrusively, especially if you already know the song pretty well.