Digging this thread up to recommend the best modern opera I've enjoyed so far:
Gawain (1991) by Harrison Birtwistle
The first thing to admire is the beautifully written libretto by David Harsent. Harsent not only convert the old verse "Sir Gawain and the Green Knight" into a drama, he has cast the whole story as a struggle between human impulse and idealism, with a poignant conclusion. As in the original tale, the Green Knight can just deal a superficial blow to Gawain, yet Gawain's realisation of his moral failings cuts him more than the most brutal of axes. Gawain's self-awareness estranges him from Arthur and his Round Table brethren, whose shiny idealism remains intact as they have never encountered a trial such as his.
The opera's symmetric structure is another reason for admiration -- the fivefold cycle of the seasons (when Gawain prepares for his confrontation with the Green Knight) in the first act is echoed by the threefold cycle of lullabyes-seduction in the second act. The haughty Green Knight who bashes into Arthur's court is later mirrored by the crest-fallen Gawain, weather-torn and bitterly self-aware.
Musically, think of Stravinsky on a Wagnarian scale -- shifting, angular rhythms; dense orchstrations; shimmering percussive textures. You won't find anything to sing along -- there is only one aria, given to Gawain near the very end. But the music, underscore the dramatic tension at every turn, still holds a powerful grip.
Like most modern operas, the only version is a live recording, less than sonically perfect. Some vocal lines are matted together (especially the choruses in the "cycle of the seasons"). The cast is not quite ideal: King Arthur has all the neuroticism of Ren Höek in The Ren and Stimpy Show (but, now that I think of it, this is probably what the composer intended), and Morgan Le Fay is not beautiful enough to be dangerous. Both protagonists -- Gawain and the Green Knight -- however, are wonderfully sung. I wish for a studio recording with a better cast, but that's not going to happen anytime soon...