Here's my site. You can try it for free: https://inter.tube
It supports almost all of Subsonic (highly recommend play:Sub on iOS). FLAC works. I never re-encode your songs, they are kept byte-for-byte. It doesn't support Last.fm (yet?) but I don't think it would be too hard to add. It respects metadata tags. There are still some glitches, and the web player kind of sucks. You can (batch) edit metadata on the web but it does not change the file, just the web/API interfaces.
To be honest I have mostly lost motivation to work on this, but I was aiming at exactly the pain points the author of this article describes. Send me an email (profile) or tweet/comment if you think it's worth pursuing again.