So I wonder if their wasn't something else going on.

Try adding settings "overlay_bg_min" and "overlay_bg_max" to your config.ini under the [hijack] section. The default values are:

overlay_bg_min = 0x00004000;
overlay_bg_max = 0x00010000;

I'm not certain, but reducing these values may help decrease the volume of the music as compared to the voice. I remember it working at one time, anyway. As to the voice itself being too loud, not sure there's a solution for that yet. My memory is fuzzy on this, but I seem to remember the number should be specified without the leading 0x (so maybe try overlay_bg_min=2000 and overlay_bg_max=4000 or something like that.)

if we could make the flite volume dependent on the players volume level- if we can figure out what the volume currently is somehow.

I think this would be pretty easy for someone (probably genixia) to do for you. He did the volume boost code awhile back and I think that requires some knowledge of the player's volume setting. If so, it's just a matter of exposing that value as an ioctl() that (our hacked version of) flite could call.