I haven't sold services yet so I'm not sure, but it certainly looks like you cannot bundle them with physical or digital products.
I set up a physical product and mentioned in the description that any purchase of said product would entitle the buyer to a digital download of a new album. As soon as someone purchases, they get an automated email with a free download code. I just set up an automated email using Squarespace's email campaign tools and it seems to be working.
The biggest drawback of this is that it adds annoying extra steps for the buyer.
It would be great if there was a payment completion page that included a place for direct downloads of content. Like, have a photo of the physical product on the left with an order confirmation number, and a message that says, "Thanks for your purchase! Your order will ship out soon. In the meantime, click the link for your instant digital download."