I was thinking the iO Dock headphone jack just connected directly to the iPad headphone jack. But from what you're describing, it sounds like it connects the iO Dock headphone jack to the digital audio from the iPad Lightning port. That would explain why the headphone jack doesn't appear as an option when docked -- nothing is connected to it. In any case, it wouldn't be possible to get six outputs (Lightning, iPad headphone and iO Dock headphone) because the iPad itself only has two output routes (Lightning and headphone).