This is exactly what I am looking for. I have just got my N7, isn't even rooted yet. But I am going to try this out in a few days, and test it with the FIIO E17, which is why I bought the N7.
It will take a few days before I have access to a windows computer for the rooting, but then I will come back with my experience of it.
HBoot: 1.27.1111 juogunaut S-OFF
Recovery: 4EXT Touch v. 18.104.22.168. RC5
Radio : 11.76C.3504.00P_11.29A.3504.18_M
Tablet: Nexus 7
rooted, with Faux kernel