I think covering a Will Oldham song is sort of like rollerblading. It may look like a really good idea, but if you mess it up you can look REALLY stupid.
Oldham's songs are so incredible that it probably seems like they would just sing themselves, right? But that wonderfully off beat voice of his does an amazing job of bringing his dark, beautiful lyrics to life and if you don't get the song right, it could be a disaster.
I wish I had more evidence to back up my hypothesis, but alas the only other cover of an Oldham song that I can think of off the top of my head is Johnny Cash's gorgeous version of 'I See A Darkness' and it's Johnny Cash for God's sake, so of course he handles it perfectly.
The Frames version of 'Ohio Riverboat Song' that I have posted here also does Mr. Oldham more than proud. Glen Hansard channels his Irish soul and puts his own spin on the tune, making it his own but keeping it equally as beautiful.
Here is the Palace Brothers(Oldham's) version
And here is the Frames wonderful take on it: