I play FLAC via Rockbox with a 5th gen iPod Video and it’s able to keep up. I did find that if the music files have the album art embedded in them (especially high resolution art) that it SERIOUSLY bogs down the iPod as it tries to downsize the photo. Once I fixed that, it plays FLAC just as promptly as any mp3.

Also, did you install switch films by chance?

How hard are you having to press to install these switches on the PCB? I imagine if the PCB is pressing on the switch housing hard enough to deform it and interfere with the keystroke, then it must be absurdly difficult to install in the first place.

Any pictures you can share? Can you maybe install a switch without the top housing to observe what’s happening inside?