Wow, I think I might have just discovered my literary evil twin. I have to force myself to read novels any more recent than post-modern…this made getting an English degree less fun than it might have been if I was an admirer of Romantics and Victorians.
Recent(ish) literary novels I liked include:
The Turtle Warrior by Mary R Ellis
The Disapparation of James by Anne Ursu
What Happened to Henry? by Sharon Pywell
Night Birds by Thomas Maltman
The True Story of Hansel and Gretel by Louise Murphy
Tinkers by Paul Harding
Shadow Baby by Alison McGhee
I’m a little surprised to see recommendations for Neal Stephenson. I don’t read him, but I have had the distinct impression that he writes genre fiction (cyberpunk?) not literary like the OP requested.
Maybe it’s just because I’m not from the UK, but I haven’t heard very much about them, yet I love their books. Specific recommendations? Try The Love of Stones or The Hidden by Hill and Downriver by Sinclair.
I enjoyed Tree of Smoke but I’m not sure it’ll be “literary” enough for the OP. Posession is great, I went on a bit of an A S Byatt jag after reading it but else of hers nothing bettered it in my opinion.
The Moor’s Last Sigh is my favourite of Salman Rushdie’s novels, it’s both more accessible and more stylish than The Satanic Verses or Midnight’s Children. I gave up on Rushdie after The Ground Beneath her Feet which was so tedious I can’t remember anything about it and Fury whcih was just bizarre.
I think I’m unwarrantedly snooty enough to be of use to you, based on your getting irritated at Nabokov for the same reason I did (I regretted it later). One piece of advice that I think might be helpful is just don’t try to find modern stuff that’s in the vein of Wallace, because there really isn’t any, and well-meaning recommendations that are based on that preference won’t be satisfying. For instance, I think Neal Stephenson is plenty good at what he does, but the thing he does is not what you’re looking for, or close to it, in my opinion, and that shouldn’t be in your head when you pick up one of his books. Franzen comes up, too, but in my humble opinion, come on.
I definitely think you should give Nabokov, Barth and Barthelme a real chance, though. And nobody has said Joyce, but I guess you’ve heard of him. How about Beckett and Flann O’Brien? I’m not sure how I feel about Vollmann recommending-wise, but I’m not sorry I read Europe Central, at least.
I agree with your recommendation that Night, so be it give Barthelme another opportunity. Barth, I’m not so sure. If Night, so be it is turned off by Barthelme’s linguistic acrobatics, he’ll be thoroughly unimpressed with Barth’s work. The dude had a major bone to pick with literature and literary criticism, and if you’re not into those things, you’re unlikely to enjoy reading Barth.
My personal recommendations are Lydia Davis (take a glance at her collection of short stories at Amazon ) and Kosinksi (start with his “novel” Steps, which again you can read at Amazon ).