Your picks of mediocre or lousy vocals with great musicians!

Who's the OP? Tater? Totally disagree with the entire theme of the thread. Inferior vocals compared by whose standard? Would Louis Armstrong be considered Inferior?  Kate Bush? Joe Cocker? Is it inferior or different? Or is it just personal preference?

Probably the absolute worst is "Wilford Brimley with the Jeff Hamilton Trio".
I can't understand why Jeff Hamilton did this album, Brimley's vocals are absolutely the worst!

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.

Warren Zevon isn't exactly Jussi Bjoerling (well, maybe next to Dylan he could pass), but his cover of "Knockin' on Heaven's Door" blows away the original IMO. Maybe knowing that Zevon was dying of cancer when he recorded it colors my judgement here, but - for me - that is an insanely moving vocal performance.

Yoko Ono deserves special mention here.

The Plastic Ono Band included (at various times): Clapton, Jim Keltner, Alan White, Delaney and Bonnie Bramlett, Billy Preston and John, George, and Ringo, among others.

Actually, this one might be tough to beat.