I think I could in fact pull this off: download a package with a control file for dvdauthor + the ac3 files + a shell script that will demux the m2v directly off the GOUT R1 with mplayer, then remux with mplex from mjpegtools (I think that's where mplex is at least), then run dvdauthor on it to produce the VIDEO_TS folder.
This could be a potential solution and would also save me having to actually upload a dvdiso!
I wonder why I didn't think of it before. Until X0 comes along and blows away the GOUT, I could use this mechanism. Problem is it locks out people using Windows...though perhaps they could follow along with the script and do it themselves.
Sample script - showing how it could be done.