I did all that, plus took the SD card out, took out the DVD, removed the thumb drive on USB2, turned off BT on my iPhone 5, turned off BT Audio on the X8500BHS, disconnected everything, turned off all sources... it still won't let me make the change. My iPhone 5 isn't even jail-broken. I'll try to go in and disconnect the battery when I get home to reset the X8500BHS to see if that changes anything. I'm trying to avoid messing around with the microbypass if at all possible.
By the way @mattesonb, now that you have AppRadio working how is it? Is it pretty cool? I'm thinking I like the X8500BHS so much, I can live with the simple Mirror-mode with my iPhone 5 for navigation on the few occasions that I need it. I had set my expectations very very low with respect to AppRadio after the reading various reviews online and with respect to the AppRadio apps in the Apple store.
I'm just glad I didn't spend the $50-60 on the "necessary" Pioneer CD-IH202 cables.