If you want the lens entirely inside the body, then you're looking at a different class of camera, something like a Canon G10. Any interchangeable lens camera is fundamentally going to have the lens (or at least most of it) hanging out. You even see that with the Panasonic LX3, where they even require you to have a lens cap, since they couldn't shoehorn one in and still have the fancy optics they wanted.

Personally, my solution is to have a compact camera that mostly fits in my pocket (the Panasonic LX3) and another one that's heavy and does everything I could ever want (the Nikon D700). If you insist on having something small and you want the flexibility of a SLR, then this new Panasonic or the almost-equivalent Olympus are the best game in town.