Thanks to some input from Robin G7VKQ I have now managed to get an external mic to work with my iPod Touch 4g. He referred me to http://www.blackcatsystems.com/ipad/iPad_iPhone_iPod_Touch_Microphone_Wiring.html which shows that a resistor to ground is needed to make the device recognise the external mic is in place. In the end I found a couple of ways to make the connection work (shown below).
When used with the Spectrum View app from Oxford Wave Research I was able to connect my lightbeam receiver to my iPod Touch 4g and record QRSS3 and CW transmissions. This is 10wpm CW being received at home between rooms by scatter in broad daylight.