When my current iPod dies (a 16GB gen4 nano), I will buy a medium condition iPod Mini gen2 on ebay, and mod it with CompactFlash.
There are a few reports that it takes a 64GB CompactFlash easily, and one report that I can find of it taking a 128GB CompactFlash, though I can't corroborate it. If I bought the flash card from a place with a good return policy, it wouldn't be much of a risk to try.
All in all, the project would cost ~$150. All other options considered, that price for a 128GB iPod Mini is pretty sweet, and would amply carry my entire music collection twice over.
I mention this because I find it unlikely that Apple will update their iPod classic anytime soon. iPod makes up only 2% of Apple's revenue today, that category includes the Shuffle, the Nano, the Touch, and the Classic. I would be surprised if the Classic made up as much as .25% of Apple's revenue.