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Yes, Buckner & Garcia did a whole album of video game songs. That's hardly recent, though....
I don't hear much popular music these days. I remember a few years ago there was the Mike Flowers Pops, who did loungey easy-listening covers of current hits ("Wonderwall"). A little further back there was Dread Zeppelin... reggae versions of Led Zeppelin songs with an Elvis impersonator as the singer.
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