fiaandcharlie: I know it's been a while since you posted, but I wanted to chime in with my experience with DFs. Seems sometimes my LO ends up waking sooner than she would have had we not done the DF. DH attributes this to the dreaded GAS problem. DD seems to be too knocked out to work a burp out after the DF, which leaves us with a screaching, gassy baby an hour or so later, and the rest of the night.. and sometimes for a good portion of the day as well.
Cluster feeding doesn't seem to do well for us. That REALLY disrupts her cycle! Could be bc she has refux, and to feed her when she's not yet hungry, and still has the last feeding in her stomach, seems to exacerbate the problem by 10!
From what it sounds like to me, your LO is probalby the same as mine.... When they're feeling well, they LOVE to sleep, and will do so no problem. So we just need to keep in mind, which is sooo hard to do when the little booger is gassy a few nights in a row, that the sleep problems likely won't turn into habits. Sounds like you have a very good baby, like mine, who will be very willing to comply with EASY as long as they're not feeling pain from gas, and later teething (eek!).
Kelsie LOVES her pacifier (as did my other 2... in fact, my almost-3-year-old still has hers but ONLY in her bed). I am not familiar with the muslin square, but I'm assuming it's something for them to suck on.. a soother of sorts. If you're worried about him choking on the muslin square, maybe you could try a pacifier. Not much risk there, and from what I've read, they reduce the risk of SIDS as well.