We consider Jill Sobule to be the musical muse of ATD–which we desperately need since we are obviously way, way too jacked into the matrix.

That’s precisely why we have the gifted singer-songwriter appear annually at our D: All Things Digital conference–to kick off each day’s sessions with one of her songs and, more to the point, add a lot of much-needed levity and nontechie soul to the proceedings.

And tomorrow, Sobule’s Internet-funded album, “California Years,” produced by the legendary Don Was, debuts. I urge everyone to click the link here and get a copy–online, of course.

And by Internet-funded, I mean that the $75,000 needed to produce the album was raised entirely through an innovative Web initiative Sobule ginned up in late 2007 via a site called Jill’s Next Record.

Sobule wrote about the effort several times in our Voices section, where you can read about her asking for ideas here, launching her fund-raising site here and, finally, talking about the result here.

Sobule (pictured here in cartoon form)–whose big mainstream hit a few years ago was a much-better-than-hopelessly-dopey-Katy-Perry “I Kissed a Girl”–had worked her way through four record labels (she was dropped by two and two went belly-up) with six CDs.

Sick and tired of the way musical artists had their work funded, she essentially asked her fans to become her record label, writing on her site: “It would be a sort of patronage thing, where you guys are the Medici family, except I give you prizes for donations of certain amounts.”

The $1,000 “platinum” level, for example, got the donor a theme song and the $5,000 “diamond” level got a house concert by Sobule.

And what her fans are getting now in the completed album is superb–a sometimes funny, sometimes sad and always moving work. (My young sons cannot stop singing her perfect song, “San Francisco,” for example.)

As Sobule writes:

“‘California Years’ was written over the last three years, following my move to the West Coast. It was influenced by the sights and sounds of the Golden State, especially the seductive, but not always sunny Los Angeles. Maybe the next record will be ‘The Utah Month’ or ‘Back to Brooklyn.’

“The whole thing was made possible by a small but mighty fan base. They gave me the love, encouragement and the dough to do this. I was truly surprised and so very grateful. This record is for them.”

Let’s cheer on efforts like Sobule’s and hope for a hit. Because hers is indeed a small but mighty effort, as all kinds of content creators try to figure out businesses in the new digital age, unafraid of the changes inevitably coming (AP might want to take notes about this).

Here is Sobule in a long interview on NPR last week (which you cannot embed, bad NPR!) and another video below on CNN about her digital project:

And here are two videos I did with her about the effort. The first has one of the songs on the new album, called “Nothing to Prove,” and the other an update on what she wants to do next, digitally and musically speaking:

I really had no idea if I would make it, or end up embarrassed with just my mom donating at the “polished rock level.” By the way, the polished rock level (free early download) was $10. But you could donate all the way up to “weapons-grade plutonium” ($10,000), where you get to sing a duet with me. One businesswoman from the United Kingdom, named Jo Pottinger, flew in last month to sing and, honestly, did a bang-up job.

So, how have I spent my money so far? Well, I got production help from my pal Don Was (The Rolling Stones, Bob Dylan, Willie Nelson, Bonnie Raitt). He got me a great rate at the old A&M studios (where Carole King did “Tapestry,” Joni Mitchell did “Blue” and where so many of my favorites recorded). Normally, I would never be able to afford to record there.

He also hooked me up with some of my favorite old-time session players, like Jim Keltner, who played on all those Beatles solo records. We recorded old-school and played live with not much overdubbing–and that includes the vocals.

I wanted to have the energy and looseness of some of my favorite childhood records, before everything got so quantized and auto-tuned. And because of that, we did it really fast.

Oh, I have also booked a day where I will sing and play guitar on 10 songs to a click track. My idea is to release it with the audio files so that people (pro or amateur) can put the tracks on their garage band or pro-tools and mix, produce and deconstruct the songs as they see fit. Thinking of having a contest for the best production.

So, now that I have spent a little more than half my budget on recording, plus another $10,000 on various stuff (donation prizes, Webmaster fees, the PayPal percentage, iPhone apps), I have around $25,000 left to play with.

I still don’t want to license the record to any of the labels. But now I have to figure out how to do all the things they traditionally do (distribution, marketing, publicity) and take advantage of the opportunities with new media (which they have not been so great at).

There have been more than a few companies that have come to me with their new paradigms for how to make money in this digital age–mostly how they can make money. I am trying to look at all of them (some do sound sort of promising and intriguing).

Oh, and I still want to have hard copies available too–I have a friend who will make a mini graphic novel that would include two pages for every story (song).

So here I am, asking you smartypants AllThingsD.com people for ideas. You do seem to know more than most in the “industry.”

By the way, I reopened the Jillsnextrecord site recently, upon request, for those who told me they wanted to donate and have their names in the liner notes (or sung in a song). If any of you are interested–and I’m just saying–it will still be up until we go to the printers in a week or two.