The Silver Bough by Lisa Tuttle

The Silver Bough was a recent treasure I found, thanks to the recommendation of a friend -- I'd never even heard of it.  Featuring an ancient and mysterious library, a strange blessing/curse tied up with apple trees, and a misty island that is half in and half out of this world: it was just my cup of tea.

Kathleen leaves her big-city library job to take over a position in tiny, declining Appleton, which was once famous for its apples (go figure) but no longer seems to have much of a crop or anything else to offer tourists.      Ashley visits her distant relatives and learns the story of how her grandmother left the town and rejected the blessing that kept Appleton prosperous.  And Nell has come to find peace and solace after the death of her husband, and her work toward restoring the apple orchard at the estate she purchased sets a chain of events in motion that will change the fate of the town.

The three women's lives weave in and out of each other's, and that of the town itself.  When Appleton gets cut off from the rest of the world after a mudslide, blocking the only access road, strange events start to affect all the locals and visitors....

This was a real gem, and definitely recommended if you want something that touches on the otherworldly and mythy.  It's not a straightforward folktale retelling but draws on many of the familiar elements and creates it's own fantastically atmospheric setting.  I think this one will appeal to fans of Charles de Lint or Juliet Marillier.