[gbm85]

OK, this is (probably) my final verdict.

The FM hardware is definitely functioning. FMSapp.exe gets data from the chip and is able to scan, set frequencies, etc. So the FM chip is definitely working.

However, the signal level is completely unaffected by having an FM transmitter right next to the phone. I tried everything... wrapping the headphones around the transmitter, holding it away, holding it close, pointing it at all kinds of different angles. No matter what I did, the signal level never showed any significant changes.

After seeing the above picture, I believe that this is truly an antenna disconnect. I think that the Bluetooth module being shielded explains why it gets no reception even right next to a transmitter. I am going to call this a lost cause (at least on version 2 devices... maybe version 1 was different?). But as always, I would love to be proven wrong.