I would listen to Laura haha...
Believe it or not, I just got Laura's "work" iHome for my birthday. I ran into the same problem though - my iPhone wouldn't fit in it without taking it out of the case. I ended up exchanging it for this iHome (
iHome - Dual Alarm Clock Radio for Apple® iPod® and iPhone® - IA91SZ). I really like it because I can dock my phone WITH the case (Speck CandyShell).