I've been reading this book (off and on, depending on when I need to go to the bathro... uh, library) and I'm really enjoying it. I, too, put it slightly ahead of the Green book in believability, but only slightly. Kind of on the same level as Paul Pacult's commercial for the Jim Beam organization, but better written.
My own inclination, not supported by Blood & Whiskey, is that there was once a man named Jasper "Jack" Daniel who made whiskey in Moore County, Tennessee, and who was an important figure in the small, relatively insignificant town of Lynchburg. He owned a distillery, which was actually operated by his nephew and friend Lem Motlow. Distilling was not considered an honorable profession in Tennessee when Jack died, and Motlow bought out Jack's brother's inherited interest in the distillery. He then, I believe, proceeded to fabricate a "Jack Daniel" character who embodied all the traits he wanted his whiskey to have. Pure marketing genius. There was a certain motel-and-gas-station-owner-turned-pressure-cooked-chicken salesman in Kentucky a century later who had a similar approach. Both highly successful. The advertising campaigns (the most important of which was the total fabrication of the "Tennessee Whiskey" classification) was all Motlow, and pre-dated any of Brown-Forman's work.