I have found that if you want a typographically flawless bibliography there often is no other way than to typeset it by hand. Even the best algorithms for line and page breaking cannot neatly resolve every issue for you. That's why TeX is so kind as to tell us about underfull and overfull boxes. Overfull boxes occur in practically every text and it is the same with bibliographies--only much, much worse because there are so many names in there (always difficult to hyphenate correctly), so many strings in bib items that shouldn't be broken across lines (page numbers, labels, ...) and so many bib items that shouldn't be broken across pages (at least not from an odd to an even page).
For my real-life project I have now taken the approach mentioned in one of my comments: To generate the main text containing the citations and references I use
biblatex and Biber as usual. For the bibliography, though, I make a copy of the
*.bbl file, rename it and use it with a separate
*.tex document to compile a separate PDF that consists only of the bibliography. Now I can make all the necessary modifications to the renamed
*.bbl file without affecting the main text. At the end, I delete the (flawed) bibliography from the first PDF and insert the fixed one from the second PDF. Another--possibly easier--way would be to compile the bibliography first, copy and paste it from the resulting PDF directly into the
*.tex source, remove the
\printbibliography command and tidy up the pasted bibliography text by hand.
This is all very cumbersome and time-consuming but who said making fine books was easy?
To show you the difference between the automatically generated bibliography and the manually optimized one, I have uploaded two PDFs here and here. As you can see, manually editing the
*.bbl file not only allowed me to optimize line and page breaks but also to do some nice things like dictionary stye headers and emphasized beginnings of new alphabetical letters. Note that there are probably still some minor faults I have to fix...