In my experience, having done both sides of the coin if you'll accept my tiredly mixed metaphorical type thing, if you can at all afford to self-finance and have the drive to do a bit grassroots promotion yourself, that's the best way. Any deal you sign will involve you owing them money/not making money till you've paid off your advance (or in the vast majority of cases anyway). Best thing to do is to self-finance, take the hit and keep control of everything (including royalties/copyright etc) then the only person you owe money to is yourself, and you have complete freedom to work in any way you can. These days with good promotion it's possible to get any kind of success/recognition you're after, whether it be Radio 1, or indie underground or whatever...

If you want to get wider kudos/distribution, make the record you want to make on your own and then license it out to a distribution company. If it's any good you'll have labels falling over themselves to distribute it for you in no time. That way you get the distribution but not the exhorbitant debt.

As an example, my band just self-financed a recording with a Grammy Winning producer which we're putting out ourselves next year. We wouldn't have been able to do what we've done if we'd gone down the conventional route, there wouldn't have been enough money in the kitty for it to happen.

Sorry my post isn't very eloquent...

I'd trust that, if the music is good enough, only a rendition performed by tone deaf monkeys and produced in the most dire fashion will let it down. Conversely, the best producer can't polish a turd.

Especially with acoustic stuff, you should be able to get something pretty reasonable down for very little. If it's great, the money will (in theory) follow and it can be re-recorded.