It's time for me to upgrade my phone and I want an iphone 5 but the new lod is a bit off putting. Has this been resolved? Could someone please explain to me why it is bad that the lod on the iPhone 5 is digital out instead of analog? Couldn't I use use an adapter and use my current lod with my arrow?

If none I this is possible I'm thinking about just going 4S just so I can use my lod and arrow amp. My iPhone is my primary portable listening device no standalones for me

How is that bad?  You can either use the new V-MODA Tuono Lightning Cable for your DAC/AMP, or get the Apple Lightning to 30 pin adapter with an 30 pin LOD cable for analog.