Wolf, I just saw your above posting from 6-30 (I don't know how I missed it before!), and know all too well what you mean about The Band being bad news for musicians in the late 60's, Clapton included. I've tried to help non-musicians understand just how influential, how revolutionary, how transformative The Band and their first two albums were, usually unsuccessfully. They and those two albums completely changed the approach to making music of every "good" R & R musician of that time I have ever known!
I think the sound of the brown album, which Fremer describes as muddy, is actually really cool. It's very organic sounding, very woody, the drums sounding real "thumpy", which is how the Gretsch drums (and Ludwig snare) Levon is playing were tuned. I have two sets of Gretsch myself, and have tuned them and damped the heads to make them sound as much like Levon's do on the album as possible. For Jazz fans, it's the sound of calfskin heads, like Gene Krupa's in the 30's. When Levon started playing in Arkansas in the 50's, plastic heads had yet to be invented, and apparently Levon tried to keep his plastic-headed drums sounding much as the calfskin-headed drums from his early days had.
As you said, the brown album is just insanely great. The musicianship, the ensemble playing (which remains unequalled in R & R to this day), the singing, just made nearly all other contemporary music sound, you put it right, lame. It's just amazing how different it is from MFBP, while still obviously being from the same group of musicians and singers. MFBP was recorded in proper studios, and is infused with the standard fake reverb and echo, sounding much bigger and glossier than The Band actually sounded. The brown album was recorded "dry", and is exactly what The Band sounded like live. Totally unlike any other Band/Group I have seen/heard live, and I've seen a bunch!