apologies to my good friend annastrophic for us japanese lobby groupists taking over this thread temporarily...
a japanese friend told me that "osake" can even mean traditional alcohol made in japan (as in nihonshu and shouchuu), so the question you were asked at the festival would mean shouchuu in places like kyuushu.
with all the potential situations it gets very complicated.
i think "sake" originally meant alcohol made in japan. as other varieties were imported the word was expanded to mean all alcohol. and in fact young people use it that way now. older people may well use "sake" or "osake" to mean strictly japanese products. and it may still be used to distinguish between imported drinks and japanese drinks (i tried it tonight in a bar - i asked for "osake" and the wait=ress= was really surprised and asked "nihonshu-te koto?") customers almost never ask in this way. they usually ask for "nihonshu".
somehow, from the situation, people understand what is being talked about. when someone asks "osake suki desuka?" they're always asking "do you like alcohol?". but if a bartender asks "osake ha ikaga desuka?" it may well mean "how about nihonshu?" as opposed to all the other drinks on offer. in the same way, "burande-" (brandy) can cover whisky as well for older people.

anyway, "obi-ru" is also a use for mainly older women running bars. it is really unusual for an honorific to be applied to a foreign word. i can think of one other "otoire" (toilet) and will pursue my acquaintances over the next few days to find if there are any more.