I love the sound of the harpsichord, an instrument rarely heard live (unless you own one ;-). I love Trevor Pinnock's CRD label (UK) recordings of Baroque compositions written for the instrument. Great works, playing, and recorded sound quality.
Van Dyke Parks: Song Cycle. It's not so much that he employed unusual instruments on his debut album (though there is a harpsichord), but rather what he has them playing (it's very orchestrated). This album was made shortly after he finished collaborating with Brian Wilson on the ill-fated Smile album. JBL included a track from the album on their early-70's demonstration LP.
Ry Cooder & V.M. Bhatt: A Meeting By The River, on Water Lily Records. East meets West. One of the best (most natural, lifelike) recordings ever made, by the best living recording engineer, Kav Alexander.
The four albums by L.A. psychedelic band Kaleidoscope, whose members included David Lindley (El Rayo-X, Ry Cooder, Jackson Browne). Unlike the above, not great sounding recordings, but oh well.
Speaking of bad sound: to hear what an electric bass should NOT sound like, give a listen to Jack Bruce's Gibson EB3/Marshall stack on Cream's Wheels Of Fire live LP. PU! I saw them live in '67 and '68, and yes, it sounded that bad in person.