Finally I took the step to get rid of comment spam without time consuming moderation, which I have been doing so far.

My quest first started with a simple solution - moderation of all comments.

Recently I started getting over 600 spams daily! Things started to get out of hand. A good option was using Captcha as suggested here in comments. However this has the downside of making comments inaccessible to visually impaired people.

Finding no other viable option I was forced to use Captcha. I used AuthImage.

After spending sometime in debugging the installation it is now working like charm. This should take care of the SPAM for a considerable period of time.
After that I will use a different font library or better yet an array of libraries to generate the captcha. I am banking on keeping out the spammers for a long long time!

Specifically I had to modify one line in the default installation.
Instead of
$font = "atomicclockradio.ttf";
I replaced it with:
$font = dirname(__FILE__) . "/atomicclockradio.ttf";

It will for the time being cut out blind people from commenting. I am trying to put in audio authentication also, however for the time being this is what we have to live with.

To add icing to the cake I kept black list moderation in place too.

The trick of the game is to continuously raise the bar for spammers, till they run out of resources to make it worthwhile. And variety is good. Let all the website implement variations of one or more scheme. That again increases their costs.
In the process if they can completely crack the hard problem of image recognition, all the better for technology.