I have been searching for a wallet-type case for my iPhone (inside a Lifeproof case) for a while. I found your post through Google and was VERY happy. For the cost of the case ($23 and free shipping at DayDeal.com) I thought I'd give it a try.
It works VERY nicely!
A couple notes:
1) For the camera lens to get a clear view through the case's opening, you do have to slide the iPhone down in the case a bit so it's not vertically centered. The bottom of the phone sticks out maybe 1/8". Not enough to worry about. In fact, it makes the Lifeproof's bottom trap door a little easier to open with the flap of the leather case still closed.
2) You CAN still get to mute switch and volume buttons on the left side of the phone even when the cover is closed. The center "hinge" of the case is just below them. The 'Down' volume is a bit tough to reach, but it can be done.
3) The bottom retention clip on the case needs to be removed (as you stated). It is spring steel so very hard to cut. I tried a hacksaw but mine was dull with no new blades around. I ended up grabbing it with pliers and bending it back and forth til it snapped.
That steel clip is covered with leather. So if you cut the leather away from the inside before you remove the clip, you can fold that remaining flap of leather over the cut-off metal to cover the sharp edge.
I'd like to thank you, Robb, for doing all the research on this one for me! I am very pleased with this setup! (and the smell of new leather is SO nice)