Avoid iPhone lock on iPod sleep
Maybe you can ask the developer of SleepCycle to put some iPod scheduling controls into the app? That seems like the best solution.

I do know of one other solution, but I'm afraid it's a Jailbreak app. There's a paid app in Cydia called SBSchedule, which (when combined with the free SBSettings and SBSettings iPod toggle) can toggle the iPod off on a schedule.