Some others:
Gary Higgins- Red Hash is the name of his only record he put out. "Higgins disappeared after Red Hash was released, first serving out his sentence (drug charges) and later marrying, having a child and spending his time as many of us do, making a living rather than pursuing his dreams." It wasn't until recently that his record was re-discovered, and he's played a couple of shows.
Devendra Banhart- I've seen him mentioned a couple of times on these boards. When I listen to him I sometimes feel like I'm listening to a haunted vinyl that I found in my grandparents basement or something. Some simple folk songs, sometimes mixed with sound effects, sometimes sounding like Daniel Johnston, and on his latest album going into other genres such as rock and gospel. good stuff!
Heron- I don't know what to say about these guys, because i've only heard one album by them, Upon Reflection: The Dawn Anthology. Pretty good pastoral folk, literally. the album was recorded outdoors and you can hear birds in the background. laid back stuff.
other favorites; Linda Perhacs, Vashti Bunyan, Nick Drake, Six Organs of Admittance, David Hess (yes, from Last House on the Left, the soundtrack has some pretty good tunes, though not all are folk), The Incredible String Band, Comus.
Recently I heard two good ones; Bon Iver
http://www.myspace.com/boniver
and Samantha Crain
http://www.myspace.com/samanthacrain
the stuff on their myspace page is enough to convince me to buy their albums, I'll definitely keep track of them.