Blues certainly was a part of bands like cream and hendrix but still it was quite a bit different. Whether or not all those genres are part of the counter-culture and The Band, The Band is obviously a lot different from the counter-culture. As Howard said, The Band was somewhat of a rebellion against the scene at the time.
I highly suggest that you do not take the byrds word on Dylan songs. They had some alright covers but they're nothing compared to the original Dylan songs.
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