I have been thinking about how I could build something, but have been traveling for quite some time, and just didn't have the right materials on hand until recently. After avoiding doing the dishes for a couple weeks, things finally got serious and I decided to give this idea some thought again. Serendipitously, this time, there was a box of K'NEX sitting in front of me, so I got to work.
Previously when building mousetrap cars I had constructed a "mousetrap dock" that made it easy to design and redesign the cars without having to change the drive mechanism. This was a great place to start, but it didn't fit my iPhone (which isn't quite as thin as a mousetrap).
Eventually I came up with the following dock which holds the iPhone 4 quite snugly. Sliding one set of white end pieces allows you to control how wide the dock is, which when extended works great for plugging headphones in through the center of one of the white pieces.
The blue K'NEX piece through the center of one of the white ones allows you to press the "Lock/Unlock" button (which is otherwise a little tricky to reach).
All I had to do now was build something that would sit on my head, strong enough to prevent the iPhone from falling off into the dishwater. You may need to customize this design for yourself, depending on your head size, but the following works well for me.
Notice the extra reinforcement at some of the weaker points (below).
I used grey pieces to extend the iPhone dock far enough from my eyes to allow me to see what is going on around me, and to make it easier to adjust my focus from the phone to the outside world (but this is also adjustable by sliding the four orange connector pieces).
Let me know if you come up with any interesting uses or modifications! Thanks to Ryan Kaarsemaker for making the great video of how the head set works!