The singer-songwriter who operates under the vaguely anonymous moniker of 'M. Ward' evokes those contradictorily aged and reborn qualities on all three of his solo recordings, mixing blues, folk and country influences with an offbeat and dream-ridden approach that places him deep inside the arcanum of an underground American music scene lately obsessed with categories like 'Alt Country', 'Lo-Fi' and 'Post Rock'.

In the end what these sub-genres suggest is a link between all manner of roots American music and the punk and grunge movements of more recent times - and what might best be described as a renewed quest for authenticity that encourages a romantic, even outlaw view of the artist as an experimental faux-primitive. It's no surprise Neil Young, Tom Waits and Bob Dylan are all name-checked again and again as bridging points between an aesthetically rich American musical past and this new attempt, so distinctly American and 'grass roots', to move forward into the future and build on that past, progressively, regretfully and somewhat Puritanically. One could locate this cultivation of an American voice, and the reverence beneath it, in everything from the writings of Mark Twain to the rural, history-haunted mysticism of The Band. What remains is some final sense of mystery, the American Dream at its most genuine, bound up in notions of transcendence, landscape, nationhood and common feeling, as distinguished by an often singular, if not downright dissident and perhaps prophetic voice. This is the American democratic project par excellence and it refuses to die even in such cynical times as ours.

Seeing Ward walk on stage at the Hopetoun Hotel in Sydney during his Australian tour is like watching an early Bob Dylan reconfigured for the present day, the first show a pin-drop enchantment, the second a struggle with the downbeat fragilities Ward floats and dives through like a featherweight shadowboxing with himself (it's ultimately a bit of failure). Ward's not there yet; but he has that something quality, a subdued confidence that gives off the aura of a man on his way to a date with destiny.

Meeting M. Ward there's a feeling he doesn't want to let you have too much, as if the likelihood might cause him long-term harm. This makes shaking hands with him and saying hello a little clumsy and ridiculous - 'Hi... er I'm sorry I don't know your first name?' 'It's Matt, Matt, Matt...' - while the whispery reserve that characterizes his singing and conversation calls him back to privacy whenever you edge in too close for a revealingly personal moment. I get the feeling this line of defence will intensify rather than fall away as time passes, that in some way it's good to be here now.

Ward's latest recording Transfiguration of Vincent is undoubtedly his most beautiful and defined yet despite his inclination to mix it up with so many musical ghosts, turning heads with its surprisingly classic and enduring feel, signposting all the aforementioned artists in one way or another and fitting proudly beside the best they have to offer.

A musical love letter to a friend who has passed away - as Ward puts it in the sleeve notes, "this record was designed to keep the loss alive and behind me" - Transfiguration of Vincent is a song cycle about death in the most life affirming of ways, with a powerful metaphysical current that seems to be about the power of acceptance and the nature of how you let go of pain and even give it some form of grace.

"How do you let go?" Ward repeats the words. "That's definitely a good question. Part of the initial inspiration for the record was a memorial service for John Fahey [the legendary blues artist to whom Ward's acoustic guitar playing style is most often compared]. He had lots of fellow musicians there of course, who only had a few minutes to say what they wanted to say. It's not like they have an hour or anything. And it's not an entertainment performance that's required. But all these people were playing these beautiful John Fahey's songs that brought him back into the room. It made me wonder what the memorial service for Beethoven was like? How that would have made you feel when you heard his music if you had known him?"

It was this experience along with the death of Vincent O'Brien, one of Ward's closest friends, which inspired Transfiguration of Vincent. "To celebrate and to mourn, and to hopefully have a little bit of humour to tell the whole story, these are things that should be part of a service. It seemed amusing to me to put that on a whole album. The most important thing, of course, is that your heart is in the right place when you do that. Then it all makes sense. And that's love."

Ward wont be drawn on who Vincent O'Brien was, or how he died. "The best way to answer that would be to keep it in the music," he says to me. "I'm keeping all the questions about him in the songs. It's easier to express him more precisely in music than in an interview. It's like the way it's sometimes harder to talk about God than to sing about it," he laughs. "Singing about God is easy."

Raised in southern California to an American father and a Mexican mother, he implies a musically passionate, Spanish Baptist family background before moving uncomfortably away from the subject. As a teenager Ward says he loved the music of The Smiths and Sonic Youth. "My dad turned me on to Johnny Cash and gospel. Mum preferred classical music. And my sister used to listen to KROQ-FM out of L.A. a lot, which was a pretty famous radio station [pioneering new wave music, then the early hip hop music scene]."

I mention a Kim Gordon quote to him, something she said about how we pay to see performers be free for us. Ward agrees with that notion, though he sees what he calls "the isolating effect of it. There's not many jobs like that around. I think the old story about Icarus is a good one. The boy who flew too close to the sun with wings held together by glue."

Isn't that exactly what you want to do? "No," he says. "When I think of that story I think of those members of the musical arena who seek status or who want to be looked at differently or in some higher way to those around them. But I don't look for that in music.

"It's the same though in every business, I guess," he acknowledges. "Success, especially where money is involved, changes your priorities. It scares me a little."

There's an internalized quality to Ward's live show that makes me wonder if he's nervous about performing, but he doesn't quite agree with that. He admits, nonetheless, "performing is not my first instinct. I like recording a lot. And my main passion is the instrument and learning how to play it. I feel employed by the instrument and that's a good feeling to have."

This attitude reminds me of flamenco guitarists who sometimes raise their guitars above their heads to show an audience that the applause should be for their instrument, whom they merely serve, rather than them. Ward likes the idea a lot. I suddenly see in the fresh blackness to his eyes and hair, in the looks inherited from his mother, something of those Spanish bloodlines and the corridos edge that subtly, perhaps even unconsciously, affects his musical style. Qualities that were present, if only in punkish attitude, in his first group Rodriguez, a San Luis Obispo, Californian three piece whose indie folk energy caught the attention of Granddaddy's Jason Lytle. As Ward moved towards a solo career he found another champion in Giant Sands Howe Gelb, with whom he still sometimes records.

So can you remember when you first knew you wanted to be a musician? The question amuses him. Ward says, "It's never been one of my big dreams. All the dreams I had were really layman's dreams. Like owning a house with a fireplace. Those were the kind of dreams I had rather than this is a career I want."

Married last year, it seems as if he can now have both, though Ward shyly says, "we're only renting". "Ownership isn't something I crave" he hastens to add. " But for some reason owning a house and some land appeals. I don't know why I have that dream," he says, embarrassed, "but I do."

Based now in Portland, Oregon, he admits it has had a big impact on his music. "I think understanding your place is another one of those big questions that interests me. Where do I belong? Where should I live? They're important questions. Portland is a middle-of-nowhere place, really, in the western part of America. There's a lot of things going in San Francisco [nearby], but living in a town where very little happens gives you a different perspective on the trends that come and go. It makes visiting cities more interesting, touring like I do. And it makes it nice to come home to a place that's traveling in first gear, unlike all these other places that are in fifth gear."

Right now in Sydney I see that Ward is making his way through a very fat paperback called TEXAS, its worn pages sitting beside his guitar case as we speak. I give him a copy of a book I wrote called Dastgah: Diary of a Headtrip, a collection of travel stories that he gets him excited about the lines between fiction and non-fiction and where they merge. "I think that fiction sometimes tells a truer story than non fiction," he says, "but sometimes the truth is stranger than fiction. A lot of memory is actually fiction, or an aggrandizement of what happened, don't you think?"

Wouldn't he say his own work, intensely personal as it, qualifies as non-fiction? "In the end I'm not sure anything can be completely non-fiction," he admits. "But I don't see my work as autobiographical. I view it much more as fiction in the sense that I put this character out there in the song and see where he stumbles."

"It's like Mark Twain says at the start of The Adventures of Huckleberry Finn, that it's 'mostly a true book, with some stretchers'. That's the best way of looking at non-fiction for me. I love the idea Errol Morris can make such great films about real people and it's like a Hollywood movie. Then you see someone like Mike Leigh's films, which are more like non fiction and closer to reality than what a lot of documentary makers ever achieve."

This interest in reality and unreality weaves through all through Ward's songs, along with a cinematic quality that allows you to 'see' them in your mind's eye, with a somewhat silvery, wavering tone to it all that signals both the lost and the cherished, the act of remembering as something highly conscious and apart from the experiences he summons up.

I ask him if his Baptist background had affected the spiritual nature of what he did on Transfiguration of Vincent? Ward turns his head down. "I consider myself a religious person. I have a firm belief in God. But I don't have a strict adherence to any particular religion. I'm taking baby steps in all of them," he adds.

"I'm still asking myself all those kind of questions though," he says. "I feel like music often used to ask those bigger questions. But in the last few decades people seem to have stopped asking those bigger questions, or maybe the audience for those questions has just grown smaller. I don't know. I'm not saying that's a good or bad thing. But I guess I am haunted by where I came from and where I'm going."

"Juxtaposing songs about death and love and loss and how you deal with it...." The words taper off before Ward says strongly, "You can't ignore it. It's like September 11. It doesn't seem right to ignore it. But at the same time it's not right to revenge either."

He sighs and starts to talk about George Bush before he retracts the words and says, "I don't want to get into that. My mind wasn't on September 11 when I made this record. It's much more personal. But maybe in America a lot of people are asking themselves the same kind of question: what do we do now that the loss has occurred."