I'm in a similar situation in which you find yourself. I have a Verizon Note2 with the Wolfson chip and "like" the sound it but it has 2 limitations (for me) keeping it from being great. 1) Only 64gb of storage and no 128gb micro sdcx chips in the near, affordable future. 2) When I piggyback either of my 2 portable amps (Fiio E11 or C&C BH2) to the Note2, I get cell antenna interference that makes listening less than optimal :/
So, I am the original owner of a working 30gb 5.5Gen video iPod and have about 250gb of mostly FLAC and >192kbps mp3 files. I really like the sound from the iPod (headphone out) but it is way too small and I have a like-hate relationship with iTunes. After some research, it appears that the Toshiba MK1634GAL160gb zip HD made for the 7Gen iPod will fit in a 5.5Gen as it is a single platter, 5mm thick drive, the same as the original 30gb HD. I thought about going with a 128gb CF card and the compact flash adapter instead of a platter drive because it is an attractive option battery-wise. However, going the CF route will cost more than twice what the 160gb drive does, will still be ~30gb smaller in size, and the CF card is not compatible with my Note2 (minor point but it would be nice).
The only thing stopping me currently is that I don't know what the battery life will be like after making the swap to the 160gb HD. The 60 and 80gb video iPods have a bigger battery so I think this may be an issue running a larger drive with the smaller 30gb version battery. I personally think getting a used 5.5Gen iPod (for you), upgrading to the 160gb drive, and Rockboxing it is the best option for both of us. I just want more than 4hrs of play time. If anyone knows, I would love to have this answer :P
Like you, I wish there were more reasonable (i.e. affordable) options out there for more than 100gb of storage but I don't see any now or expect to see any in the foreseeable future. I may just take the plunge anyways and see how it goes. If I do, I will post back here and let you know what I found :)
Edited by SpongeyOne - 10/13/13 at 10:14pm