It took me a while to figure it out, but I troubleshot my own problem. Apparently my iPod's 3.5mm jack just went bad and it's making anything connected to it sound like total garbage. I guess it's time to return my brand-new FiiO e11 and pick up an X5 DAP.
Thanks for reading and sorry for having wasted people's time with this thread.
If your iPod comes with an LOD port, get a FiiO L cable (or other brand) and connect the iPod's LOD port to the input port on the E11.
But if your just looking for any little reason to get the Fiio X5, go for it.