Lulu vs all challengers

Re: pencil drawings...
I had the playtest copy of my Angor book printed at lulu.com with a (photshop tinted) pencil drawing for the cover. Far from being merely acceptable, the quality of the printed image was beautiful. I also had some images from 19th century magazines (that were scanned as grayscale) which printed very nicely.

Just to point out...
Another bonus with lulu.com is that they are already set up to serve as a storefront for internet purchases of your product, which can really simplify things. You can still get your higher volume printing (for distribution or taking to cons) done elsewhere if thet's most cost effective for that purpose, while still keeping a limitless source of additional copies available online (no sold out print runs). You can also still use your own ISBN number if you chose to.

lulu.com and similar services have a lot of factors going for them besides the actual printed book you'll hold in your hand. Even if they don't serve as the entire scope of your publishing plan, it might still be worth looking at them for the related services that you could use.

Edit:
Another thing with lulu... You can order a single copy, if you want to. Assuming you leave yourself with enough time, you can see the actual final printed product before committing to a large print run.