"But did these companies attract top-level, "name" talent in the way that Image, Dark Horse, IDW, etc. do today? When I was growing up, you rarely if ever saw a John Byrne, Erik Larsen type working for these independent companies. "

Yes, they did. Kirby was with Pacific for a time. First had guys like Chaykin and Grell, Staton and Alan Moore as well as some up and comers like John Ostrander, Mike Baron, Tom Mandrake, Tim Truman, Steve Rude. I think Aragones was with both Pacific and First. You saw a lot of great talent and a few A-listers on occasion. 

Did a lot of people jump ship to independents? No. The independents couldn't guarantee a paycheck the way the big two could, so mostly it was because people wanted to do things they didn't think or feel that they would get to do with Marvel or DC. So a lot of the early independent comics , like the early independent movies, were more about what the creators wanted to express than doing what was most commercial. (Not saying people didn't want to make money, just that they weren't aiming for the comics mainstream).

By the Image years, independent comics had begun making money, and it started to make more sense for comic book professionals who didn't want to risk going without a paycheck. Or for creators who just wanted to do mainstream stuff their own way, have some creative control.

John Byrne wrote: ...So… something that didn't happen -- Marvel Stores -- was a bigger problem than something that did -- Image Comics--?...

That was just a part of the whole mess. Marvel's actions with buying Heroes World and making it the sole distributor of their product is what led to DC, Darkhorse, and Image choosing Diamond as the only distributor that could carry their product, which left the third largest distributor, Capital, with the short straw.

I remember clearly calling Capital (I dealt with all three of the biggest distributors when there was three to deal with) about a problem with an invoice back in 1996 only to have a representative answer the phone "Diamond Comics." I thought I had dialed the wrong number! But, no, Diamond had bought Capital, who no longer could compete as a result of what Marvel did, and the other large publishers signing exclusively with Diamond.

Then Marvel couldn't handle its losses and couldn't run Heroes World properly, and so they filed for bankruptcy protection and closed Heroes World, returning and signing an exclusive agreement with Diamond Comic Distributors. This is why we have only one real major distributor to this day.

As far as I understand it, Marvel, DC, Darkhorse, and Image still have exclusive contracts with Diamond.

John Mietus wrote: ...Marvel pulling their distribution from the regular channels and becoming their own direct sales distributors, prompting DC and thereby forcing all the other companies (and eventually Marvel themselves when their experiment failed) to sign exclusive distribution contracts with Diamond -- was a bigger problem than something else that happened -- Image's lack of deadline discipline...

Yep. As my other posts attest, I have to back John up on this.