enjoyingsilence
Been here awhile...
So this is mostly about your "incredibly discerning hearing range" reference 3.5mm versus a USB input?
You are "actually" able to hear the difference?
edit: Before I get into a fight with someone, I'm going to note. I can't fix your problem. I can offer outlets of solution and points of contact for this issue. Many of which have been exhausted by the original creator of this thread. However, if one is only worried about signal quality from their iPod using a 3.5 mm line out jack , aka the headphone port on their iPod, into the aux in (headphone port) in the armrest, there are various hardware solutions.
For example. They make a iPod dock connector to 3.mm jack. Here is an example of such an item.
http://www.amazon.com/dp/B000J022G6?smid=ATVPDKIKX0DER&tag=dealtime-ce-feed-20&linkCode=asn
Since there is an item description that summarizes what it does, I'll spare the trouble of typing it
The iPod Compatible 3.5mm to Dock Connector Audio Cable allows you to play music from your iPod through your home or car stereo, computer, or notebook. The dock connector sends line level audio out from your iPod, providing better sound quality then when using the headphone jack. The dock connector also allows you to control the volume of your iPod through your stereo or computer instead of having to adjust the volume on the iPod. The lightweight construction makes it easy to take it anywhere you go. Works with iPod Nano 1st Generation, iPod Nano 2nd Generation (aluminum), iPod with color display, iPod with video, iPod Nano 3rd Generation (aluminum), iPod Classic, iPod Touch, iPod with click wheel, iPod 10GB, 15GB, 20GB, and iPod mini.
You are "actually" able to hear the difference?
edit: Before I get into a fight with someone, I'm going to note. I can't fix your problem. I can offer outlets of solution and points of contact for this issue. Many of which have been exhausted by the original creator of this thread. However, if one is only worried about signal quality from their iPod using a 3.5 mm line out jack , aka the headphone port on their iPod, into the aux in (headphone port) in the armrest, there are various hardware solutions.
For example. They make a iPod dock connector to 3.mm jack. Here is an example of such an item.
http://www.amazon.com/dp/B000J022G6?smid=ATVPDKIKX0DER&tag=dealtime-ce-feed-20&linkCode=asn
Since there is an item description that summarizes what it does, I'll spare the trouble of typing it

The iPod Compatible 3.5mm to Dock Connector Audio Cable allows you to play music from your iPod through your home or car stereo, computer, or notebook. The dock connector sends line level audio out from your iPod, providing better sound quality then when using the headphone jack. The dock connector also allows you to control the volume of your iPod through your stereo or computer instead of having to adjust the volume on the iPod. The lightweight construction makes it easy to take it anywhere you go. Works with iPod Nano 1st Generation, iPod Nano 2nd Generation (aluminum), iPod with color display, iPod with video, iPod Nano 3rd Generation (aluminum), iPod Classic, iPod Touch, iPod with click wheel, iPod 10GB, 15GB, 20GB, and iPod mini.