Vinnie, thanks for looking into the much-maligned iPod. I posted this link at head-fi.org.
My main problem is that ugly hole in the back with line sticking out. I may be a perfectionist audiophile, but that look just isn't going to fly with a lot of people.
Is there any way to use smaller caps, maybe silver mica, after the DAC chip and stick it inside the iPod, terminated into 1/8" female mini jack somewhere on iPod?
If there's no room for caps, maybe just take the wires from DAC chip to a 1/8" jack on iPod, then use a removable short adapter that has blackgate caps inside the cable?
BTW, is the headphone out jack improved at all by this mod?