to the original question:
it seems the ipod really, REALLY likes being "on" when it's being charged. that part is built into the original firmware -- AFAIK you cannot keep it from turning itself on during charging at all (though if i have some detail wrong here, someone feel free to correct me).
the problem is, rockbox doesn't know how to recognize that an ipod is plugged in for charging, like it does with other players (hence the lack of a "charging" icon, or a "backlight always on when charging" option). Thus it will auto-poweroff after X minutes (X is an option you can choose in the menus), and when it does poweroff, the firmware will think it's been plugged in, and auto-restart, but it will then fire up rockbox. get it? kindof an unbreakable loop.
The workaround i've found (even though the one someone's already posted above may in fact work better) is to go into the rockbox menu and set "idle poweroff" to "always on". the disadvantage, obviously, will be that it never powers-off, even when it's not charging; however, it'll at least stay on overnight while you're charging it, and not keep blinking at you thusly. Hopefully someday they'll figure out how to make the ipods detect charging... but i'm not aware enough about the technicalities for why this hasn't happened yet.