I was listening to Otis "Elevator" Gilmore: Cincinnati's Finest today. It was recorded by American blues/rock guitarist Danny Adler, and sold to Flyright Records in England as music recorded by an obscure Cincinnati bluesman who had worked as an elevator operator. The record was released in a small pressing in 1989 before the hoax was discovered.
I know of a few musical hoaxes from the more distant past: Steve Allen recorded two LPs by supposedly obscure pianists, The Discovery of Buck Hammer and The Wild Piano of Mary Anne Jackson.
And in the late 1960's there was the Masked Marauders hoax created by Rolling Stone magazine.
Does anyone know of others in the same vein?