Jim: One of the marked differences between lyrics and tunes is that lyrics are seldom improvised whereas tunes commonly are. And yes, even solo, part of my improvisation or tune variation is to intermix what are essentially "harmony" notes to make the underlying harmonic structure more evident and complete, so it's not amiss to talk about harmony in a solo-voice scenario.

I begin playing with melodic variations as soon as I've got the basic melody in mind. That's a LO-O-O-ONG time before I've done lyrics memorization. And from line to line, verse to verse, I apply variations in melody, phrasing, expression--virtually every musical facet. Some variations are small, some major; some pre-planned, most decided upon the spur of the moment. So your assumption that reading lyrics must inhibit musical creativity and improvisation is, in my experience, flat wrong.

Lyric improvisation I purposefully avoid, since I work out my favored wordings quite carefully beforehand--substitutions tend to detract rather than improve. If a useful wording variant occurs to me while singing, I'll jot it down, and if upon reflection I consider it a desirable improvement, I'll make it a permanent part of my lyrics sheet. I do this even for memorized songs, because when I sing something that sounds weaker than it should, it's often because I've strayed from what I worked out as the "best" wording. Creativity, like "progress", is not reliably forward-moving; one must know the most appropriate times to apply it.

Granted, most people don't expressly work up their own lyric versions; they just learn and parrot some printed source or the version from their favorite recording. Whether they're reading the lyrics or recalling them from memory, the fixity of an "authorized version" is the same (perhaps more now than in the past). Nothing prevents a person from replacing a line or adding another verse--well, nothing but copyrights.