Yes you might find about 70% of maximum volume will work without distortion. I have not found anything specific in Apple technical specs, but usually with this kind of thing, around that value is 'unity' where it generally is the best setting. But as always, run some tests.
Do you have another audio app you can test on? run it for a while (obviously) and see if it's audio drops out. (With and without bluetooth.)
Also try the iPod app... playing some audio MP3s or whatever and see if it drops out. (With and without bluetooth.)
Also try it using just the internal speakers, not the cable. This is unlikely to have any effect though (!)
Unlikely, but is it related to how many apps are suspended in the Task bar... they can use up memory (multi-tasking.)
Let us know if the Apple store has helped you. It could be some strange bug in iOS or hardware.
If I think of anything else, I will post back.
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