When an artist vanishes for 40 years, rumors are going to spread, none of them good. So it was with Shuggie Otis. Nearly four decades passed after the release of his third album, the psychedelic soul masterpiece Inspiration Information, with barely a peep or public appearance to prove he was even still among us. Did he get fed up with the industry and retire into a life of manual labor, languishing in bitter obscurity for the rest of his days? Or did he descend into drugs and mental illness and take up residence under an overpass?

Well, Otis regrets to inform you that the reason for his long absence isn't nearly that tragic: He just couldn't get a deal. After being dropped by Epic Records in the mid-'70s, Otis spent the ensuing years trying to persuade a label, any label, to sign him, and had so many doors slammed in his face he grew numb to the feeling.

"It was always some mumbo-jumbo about, 'I don't think it's a hit,' or, 'We want to put you with a producer,'" he says over the phone from a hotel in Boston. "Just, 'See you later,' in so many words."

That's the narrative he's been selling, anyway, since Sony reissued Inspiration Information in April with a disc of unreleased material and finally pushed Otis, at age 59, back onto the road and into public consciousness. It's a familiar tale these days, what with the recent rediscoveries of Sixto Rodriguez and Charles Bradley, artists whose careers were frozen in time in the '70s and thawed out in the digital age. With Otis, though, the story is harder to buy, if only because, unlike those other musicians, he's never lacked influential admirers. Recorded in his early 20s, Inspiration Information's fluttery grooves, rainbow-blues guitars and then-revolutionary funky drum machines—all played by Otis—allegedly floored Sly Stone, and so impressed the Rolling Stones they offered him a spot in the band. Quincy Jones expressed interest in producing his next record. Doggedly independent, perhaps to a fault, Otis rejected such overtures. "I didn't want to be a sideman to anyone," he says.

In 2001, David Byrne re-released Inspiration Information on his Luaka Bop label and won Otis even more fans, from Questlove to Prince to Lenny Kravitz. Still, Otis insists, no one would give him a contract. He continued living off session work and royalties from his biggest hit, the incandescent "Strawberry Letter 23," made famous by the Brothers Johnson's 1977 version, while pitching himself to practically every record company in North America. Although he has hinted at battling personal problems, which he declines to elaborate on, Otis says, during all that time, he never got down. He always felt, eventually, he'd get a shot at his own second act.

"Deep down inside, I always thought I'd get a deal," he says. "I didn't think it'd take so long for people to actually let me back in. But I believe someone was holding me back. I don't know who."

Whatever the true story, the world has Shuggie Otis back. And no one is happier about that than Otis himself.

"I'm on top of the world right now," he says. "I'm not No. 1, but I'm back out here on the road, and that means the world to me."

MFNW show previews: Tuesday-Wednesday, Thursday, Friday, Saturday-Sunday

Tickets and official site: musicfestnw.com

SEE IT: Shuggie Otis plays Crystal Ballroom at 9 pm Saturday, Sept. 7.