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I'm a professional musician, and in general I personally would not allow someone to make copies of my performances and make those copies available to the public, unless I was involved in the production of those CDs and received some percentage of the income.
But of course I can't speak for all musicians, and as I said earlier (and someone else pointed out) this is not a very common situation. If I was involved in the church, then I might have no problem with it and consider it a personal "donation" to the church.
However, my guess is that most musicians would not be accepting of this. Your performance belongs to you, it does not belong to anybody else. As you point out, whether or not the copy is sold, it is still not legal to have copies in your posession, period, without permission of the performer.
Absolutely you could be sued for this, and you would lose the suit. This happens all the time. My advice would be to get written permission from the musicians and work out some fair monetary arrangement. How much they get would depend on how much work the church does in promoting the CDs. If the church does no promotion and simply puts them on a table, then a 50/50 split would be fair.
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