So it's been a very long time again between posts. So much has happened. Let me first begin by saying that I am very impressed with iSCSI performance and I believe that it is mature enough to actually run production workloads (but it really depends on the type of workload).
After all of the benchmarking and analysis, we finally decided on moving forward with a purchase of an iSCSI storage solution. For the types of queries we run (large amount of records to scan, small resultset returned) we had to tweak the schema just a bit in order to realize the performance that we desired (that plus good quality fibre-channel drives to get that extra oomph that's needed).
Bottom line is we had to make a significant investment in hardware in order to realize the benefits of having a proper storage solution in place. The benefits though outweigh the overwhelming maintenance required to keep all of the machines running. Backups using the storage provider's snapshot mechanism will be extremely beneficial as well. All in all, a good decision to ease our minds.