Measurements of cosmic microwave background spectral distortions have profound implications for our understanding of physical processes taking place over a vast window in cosmological history. Foreground contamination is unavoidable in such measurements and detailed signal-foreground separation will be necessary to extract cosmological science. In this paper, we present MCMC-based spectral distortion detection forecasts in the presence of Galactic and extragalactic foregrounds for a range of possible experimental configurations, focusing on the Primordial Inflation Explorer (PIXIE) as a fiducial concept. We consider modifications to the baseline PIXIE mission (operating 12 months in distortion mode), searching for optimal configurations using a Fisher approach. Using only spectral information, we forecast an extended PIXIE mission to detect the expected average non-relativistic and relativistic thermal Sunyaev-Zeldovich distortions at high significance (194σ and 11σ, respectively), even in the presence of foregrounds. The ΛCDM Silk damping µ-type distortion is not detected without additional modifications of the instrument or external data. Galactic synchrotron radiation is the most problematic source of contamination in this respect, an issue that could be mitigated by combining PIXIE data with future ground-based observations at low frequencies (ν 15 − 30 GHz). Assuming moderate external information on the synchrotron spectrum, we project an upper limit of |µ| < 3.6 × 10 −7 (95% c.l.), slightly more than one order of magnitude above the fiducial ΛCDM signal from the damping of small-scale primordial fluctuations, but a factor of 250 improvement over the current upper limit from COBE/FIRAS. This limit could be further reduced to |µ| < 9.4 × 10 −8 (95% c.l.) with more optimistic assumptions about extra low-frequency information and would rule out many alternative inflation models as well as provide new constraints on decaying particle scenarios.