I've recently been contacted by someone who appears to be from a local band based out of Little Rock, AR. It seems legit as the Facebook link provided in the message was valid (https://www.facebook.com/MOTHWIND).
But my real concern is the the art requested to be used for their album cover. It's a piece I made for a school project for a sci-fi literature analysis class. Since it was the final weeks of the semester and I was cramped for time I almost completely copied the reference photo I was working from. I made many changes of course and worked by eye as much as I could but it's still pretty close.
If you can get written permission for commercial use of your derivative work from the owner of the stock photo, you and the band will be fine.
Otherwise, don't do it: both you AND the band take a risk that isn't worth it.
I think that your last sentence in your post really answers the question. Yes, there is liability especially if they become well known.
As the saying goes, nobody fights over a failure, but success...that's different.
As flattering as the offer is, refuse it.
Maybe you can salvage the opportunity and tell them you would be happy to design something new.
If the band can't afford to pay you, then why are you letting them use it?
Regardless of whether or not it's derivative, you shouldn't just give works away for free. All it does is continue to devalue the art that we all do. If we keep selling ourselves short and people continue to get art for their commercial products without having to pay for anything, no one will ever want to pay for anything.
I'd tell the band to sketch something out themselves if they can't afford to pay for it.