One minor point:
It's not that small publishers don't know the law. It's that their corporate attorneys don't. Surprisingly few attorneys who work in-house at publishers have a strong background in copyright law, let alone copyright litigation. And it's even worse when a small publisher relies upon the guy who set up the LLC.
Permission isn't always necessary; contrary to the bluster you'll hear out of Nashville, song lyrics are subject to fair use under § 107, just like any other copyrighted work. Asking permission is almost always a good idea, though, if only from common courtesy (and you never know where you might find a good blurb—see, e.g., Barbara Kingsolver/Carrie Newcomer).
I'll repeat this here as food for thought: There are no reported decisions finding that two lines or less of a lyric that contain neither a proper name nor the title of the song exceeds fair use. A very few reported decisions find infringement at three to six lines, but they are all under the 1909 Act (which did not have a codified fair use privilege; at that time, fair use was a judicial doctrine only). That's not to say that merely getting sued for copyright infringement avoids trauma; it's just a bit of context. A song lyric, for copyright purposes, is nothing more than a poem; song lyrics get more attention primarily because more people listen to popular music than read poetry, and because the historical arrogance of the Harry Fox Agency has overcome all good sense.
