is there a market?

Is it possible- yes, and there are some smallish labels that do this, but a market? I know you aren’t asking because it’s about making money, but you know what they say about how to make a small fortune in the record biz? (Start with a large one). The main issue is who will buy, and how you will distribute, I think. And, along the way, it costs some money. Not trying to discourage you. Go for it. Some of the stuff I like and that is really well recorded is very simple- Chris Whitley’s Dirt Floor was recorded on a two track in a barn, and Classic Records released it on vinyl. (It’s scarce because I don’t think it was a big seller for Classic and getting a new copy- some still exist- isn’t so easy. But, great record, and I can’t believe the production costs were very high).
And you are right. There are some absolutely superb musicians who would jump into your arms -- they need the money. In Austin, top tier musicians work for almost nothing- big names, too. (At least among other musicians). The plight of big orchestras these days, at least in the States, is pretty sad. There are union issues too, with orchestras. (Those can be dealt with). So, you have to be pretty committed, and spend some bread or better, someone else’s money. But, you are asking the right question, i think: Is there a market? And that question can only be answered by looking at how much you are prepared to lose, rather than how much you might make. If that makes any sense.

folkfreak- Yarlung was one of the labels I was thinking of in my previous post-they also do vinyl releases- none appear to be full orchestras, but more small scale stuff, though some classical, e.g. Janaki String Trio. I had heard the tape courtesy of Myles Astor and bought the record because it was interesting. 
It's been a long while, but Lyrita did a great job some years ago with a 20th Century British classical catalog. The classical market has probably narrowed since then. But it was a nice change from some of the usual warhorses.  That catalog was far more than just the Malcolm Arnold record that HP touted. They were well made records (Decca or Nimbus pressed as I recall). 

Cost. Master in the can is cheaper than new, from scratch production particularly if large production and party issuing record already owns the rights in the master and doesn't even have to pay for that licensing fee. 

TZ- it’s a cost factor, and also, from a market/risk standpoint, reissuing a known warhorse is a safer bet than creating something new (apart from the cost risk- did I mention risk and cost?) :) Same complaint could be made about many reissues on the pop/rock or even the jazz fronts too, though I gather folks are pretty happy will some of the jazz reissues of blue note by music matters. First question someone behind the desk making a decision would ask is-- what’s the market? Same question you are asking.
Ping me and we can talk. I sent you a PM a couple days ago.
best,
bill hart

Analog- it isn’t just that, either. The early stuff was done really simply- two track recording of a jazz combo or whatever. There is something very alive about some of those recordings, before we had complex boards, multi-miking, outboard processing, etc. An immediacy that makes the recording sing in a way that doesn’t sound as processed, even when arguably in the analog domain. By the ’70s, at least with studio recordings, all kinds of stuff was going on in the recording, mixing and post-production process. Some of it winds up sounding spectacular, but so many variables, and so much to get wrong.
For what it’s worth, I’ve always considered myself an ’analog only’ guy and don’t want to turn this into the A v D thing (which gets beaten to death) but some of the recordings I have on vinyl of newer stuff never saw tape to begin with and sound amazing. Granted, it is more prog rock, like the Steve Wilson stuff, but there have been occasions- RLJones Girl at Her Volcano was an early digital (in process and in large part I think in recording) and sounds very good (particularly given how early it is, and how bad her roughly contemporaneous Pirates sounded); there is a live Billy Joel record, Songs in the Attic produced by the late, great Phil Ramone that was recorded digitally-it is pretty impressive. I’m not trying to sell you on digital, but only pointing out that one of the reasons the older records sound good isn’t just the analog part in my estimation, it’s the not being messed with/confusion/multimiked/mixed/processed to death that is also killing the "life" in some of these things as the technology progressed. Otherwise, you’re preachin’ as they say.
PS: Dan- re old pressings and quality-  I don’t think the pressings were all so bad- in fact, some of the 6 eyes or other early jazz are great, as were some of the classical and pop on other labels,  but condition is always an issue with a record that old in my experience.
best,
bill hart

"We'll fix it in the mix."  :)