Ken Peplowski is really something -- heard him years ago in an, as you say, fairly unimaginative context but seeing him more recently in some of Allen Lowe's projects has brought out another side of his playing. Precision, creativity, and an incredible tone.
Though working more in an avant-garde realm, James Falzone -- who's in the process of relocating to Seattle from a long time in Chicago -- is extraordinary as well. His music often straddles the line between contemporary composition, free music, Giuffre, De Franco, and for want of a better term, "Middle Eastern" musics.
Jeremiah Cymerman is also an excellent player, though his work -- which often employs electronics and harsh noise elements -- is perhaps not for the faint of heart.