OK, I think I found out why... From PAC's website the description for the GLI says:
"Great for eliminating ground loop noise from radio pre-amp outputs. Perfect for eliminating DC Current from your RCA cables. Excellent at reducing most noise in your RCA signal path. • Close to perfect response of +/- .03 dB from 20-20kHz. • Unlike other manufactures which use 1:1 transformers, PAC utilizes proprietary audio transformers for a 1.3 dB gain."
Never claim I was an EE...
So... Any idea on how I should hook the GLI up to still get the current through to the iPod? Or is there other device I can use instead of the PAC GLI.