I believe it was Amanda Thomas who asked in the first MUG about automated blog emails via Marketo. I've now also found a need for this at Xero and am investigating Digesto which is actually what Marketo use to send their blog emails out.
I had a call with them last week and the solution starts from $4K annually and essentially will automate emails of your blog content on the frequency you set it to (once a week, two times per day etc). Your blog needs to have an RSS feed and it will pull in content, including images. A specific email template may need to be coded to suit your brand.
The only downside is for reporting purposes. Because you are automating everything it sends the email from the same email inside the same campaign each time.
They have a 14-day free trial and I'll let you know whether it's something we pursue. Let me know if you've used it.