I fixed the problem with connecting my iPod Touch Gen 4 to my car stereo via line out. Rather than make another custom cable I used a cable from Rocketfish:
http://www.rocketfishproducts.com/products/mobile-audio-video/RF-IPCAU6W.html
It has a 30 pin iPod connector on one end. It has a USB connector and RCA plugs for audio left, audio right, and video on the other end. Before the installation I checked the pinout of the Rocketfish cable to see how it compared to the pinout that was referenced earlier in this thread. All of the GND connections are bonded together inside of the cable. Pin 21 was tied to Ground through a 500K ohm resistor.
Pin 1 GND
Pin 2 GND (connects to line out common in RCA plugs)
Pin 3 Line Out R (connects to line out right in RCA plugs)
Pin 4 Line Out L (connects to line out left in RCA plugs)
Pin 11 GND (this being tied to Ground sends audio through line out rather than speakers)
Pin 16 GND (connects to ground lead of USB adapter)
Pin 21 500K ohm connection to GND (enables serial communication)
Pin 23 USB Power (connects to 5VDC lead of USB adapter)
Pin 25 USB Data - (connects to Data - lead of USB adapter)
Pin 27 USB Data + (connects to Data + lead of USB adapter)
The 500K ohm resistor on pin 21 was needed to communicate with my iPod Touch Gen 4 and my iPhone 4S. The 68K ohm resistor on pin 21 worked for my iPod Touch Gen 2 and my iPhone 3GS. Hopefully this will help others who encounter this type of communication problem.