Its possible the Neo FreeRunner cell phone could be adapted to act as a portable digital source. Neo FreeRunner - Openmoko The hardware, firmware, and software are 100% open source, and it has a USB port. It would need a driver that makes the USB port appear as a music source, much like the drivers linux, windows, os x have built in. And it would need a music player. It also has a microSD slot supporting up to 8GB SDHC. It is possible there is already an open source music player for this handset. That is as far as I got in my investigation.
Googling it gives you more result than I can offer. Its basically a full blown windows-xp netbook computer with touchscreen, thats the size of an archos PMP, or a big phone (still pocketable). similar product would be like now defunct OQO model 2+.
I HATE PMP because it's either missing FLAC, or OGG, or MKV, or ....there is bound to be something missing. With a full on PC in a palm, u get browsers, all the freakin codec you can use. AND a usb, so with ASIO4ALL and a USB DAC, it's pure digital path.
I do realise portable source w/ digital out is rare because nobody beside us wants it, so why make the device bigger. Not to mention you still need a DAC and a small amp?! thats too much to ask for when walking down the street.
IN A CAR, otoh, it's completely legit requirement, and this combo is like $700, get me a full blown touch screen PC USBing into UD10.1 SPDIF source out to a DAC, or if I want, I can use the burr-brown chip in UD10.1.