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Just been listening to The Fall's Live at the Witch Trials album and sense a definite psych-folk influence in some of the tracks. Even more so in the Dragnet and Hex Enduction Hour albums.
Bands like C 93 and The Fall definitely seem to have opened up the genre even further into this almost psychotic, occultist area (picking up from bands like Comus, as someone already mentioned).
Another album that sort of hanesses this sort of energy is, of course, Charles Manson's Lies and the Family's Family Jams. Although I'm not sure if I'm making the association because of the music or because I know about the events associated with them.
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