Yes there is. Being in the DAP amping scene for a while, the iMod + V-Caps rules.
BUT now that I have moved to iRiver H120/H140, I am blown away by the output. Using Wave file as my source and the H140 feeding it out through optical link as Ditigtal stream, the iMod is clearly outclassed in most aspects. It's definitely two or even three steps better than any modded iPod+Amp (depending on what type of external DAC/AMP you use)
The thing is, it all depends on what source you use. Of course if you are feeding out lossy format to a highly revealing and resolving DAC+Amp, you not gonna get that Hi-Fidelity you seek.
Another problem with this setup is, if you go for a portable setup you will find your choice very limited. Most Head-Fier uses Ibasso D1 DAC/AMP or HeadRoom 2006 MicroDAC (both no longer in production). You will need to find a DAC/AMP with battery power that offers optical link input. In my case I decided to use a DIY kit from HifiDIY.net and retrofit it into a Hammond case and a choice of 12-18V batteries. So for it has been working good for me bacause I get portability. But another problem is my setup became a FOUR bricks rig (H140+DAC+Battery Pack+Amp) and is barely transportable. But I can live with it because the quality of the SQ justify it.
And just like Duggeh mentioned, the iRiver H120/140 is the only DAP in circulation that offers Optical out. There are another two, the Archos Jukebox 20GB (Coaxial Out and VERY old) and Edirol R-09 (Optical - VERY Pricey and lack of space). So the H1XX still is the better choice and still obtainable through eBay - BUT expect to pay premium price for them as both of my H140s cost me no less than $200 each and my H120 almost as expensive.