Your picks of mediocre or lousy vocals with great musicians!

Personally, I enjoy the singing of many/most of the perps cited.  It's that unusual quality that makes the song more charming.  Another example is the Band--Rick Danko and Richard Manuel had quirky voices which I like, but I understand why they are not everyone's cup of tea.  Levon Helm sounded like a country hick but he had a great voice for the material he sang.  They had each other plus Robbie Robertson and Garth Hudson playing behind them, not a bad lineup of players.
As far as Dylan covers:  the all-time fave is Hendrix' version of All Along the Watchtower.  And check out Judy Collins' cover of I Pity the Poor Immigrant, with Buddy Emmons wailing on the pedal steel guitar.

ps--I absolutely love Levon's voice, whether singing, acting or just speaking in conversation.  I'm from a small town in Southeast Texas and it doesn't get any twangier.  I'm a hick from the sticks myself so I recognize another when I see one.  It was not a knock in any way. 

I think people are way too quick to jump the gun and take offense or blow the whistle over nothing these days.  

bdp24, I agree with your remarks about Richard's voice.  I love it.  But I've known people who didn't like his or Rick's voice.  I am a huge fan of the Band (first two LP's especially). 

Actually, I listen to Hendrix for the songs as well as everything else.  He's not a great singer but he does okay, as does Clapton (I'm a fan of both).  Little Wing has been covered so much I wish people would leave it alone.  I think Manic Depression, Angel, Voodoo Chile (Slight Return) and Fire, among many others, are great songs.  But I don't want to hear most covers as they fall far short of the original.  Anyway, I'm sorry the songs don't register with you but I don't think I'm alone in this respect.  And, FWIW, I like his tone.  Lots of celebrated players have worked hard to duplicate it or to create a personalized variation thereof.  Sometimes they come to close to the original and put me off (SRV and Robin Trower come to mind immediately).  Hendrix, IMO, paved the way for not only a new way to play the guitar but new sounds and songwriting for decades beyond his time.  As much as the Yardbirds did to push things forward, Hendrix was the one who smashed the barriers and led rock into a new age.  Confused youngsters and wannabes have spent the last 50 years trying to catch up.

I never cared for Bowie's voice either, frankly.  Then I found out he patterned himself after Anthony Newley, who I could not stand to listen to, so it all added up.  Different strokes for different folks--I'm sure I listen to artists who make some people's skin crawl.