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I love Pentangle.
Some of their stuff is definitely more folk-rock, some has a bit of jazz influence as well. "Cruel Sister" and "Solomon's Seal" are two favorites for me with them. Love many a Jansch and Renbourn solo LP as well.
I wasn't implying that folk had to be purist/trad to be considered "folk" earlier; I just think some artists are far more singer/songwriter than folk and just because something is acoustic guitar/voice-based doesn't mean it's "folk." Now, I can't stand Ani Di Franco, but I love Nick Drake and I would place him in more of a singer-songwriter category than a folk one as well.
Some folk stuff I love, some very far-out and some closer to trad:
Stone Breath (some of the very best this country has offered up in the past decade)
Certain Current 93 LPs, "Thunder Perfect Mind" and "Earth Covers Earth" in particular
Comus - First Utterance
Stone Angel - S/T
Midwinter - S/T
Robbie Basho - The Grail and the Lotus
Jan Dukes DeGrey - Rats and Mice In The Loft (stretching a bit, but awesome)
The 2nd and 3rd LPs by Judy Collins are really really great; filled with agony and death. Don't let what happened to her later on get in the way of these two great albums!
Edit:
I enjoy so much of this stuff it's hard to come up with a short list!
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