[orgopete]

…
In this reaction it is potassium hypophosphite KH₂PO₂.
…
The only think I can think of is that the hypophosphite scavenges the I₂ to initiate an Atherton-Todd or Appel-like Iodide substitution mechanism.

Honestly, I hadn't noticed that it was a hypophosphite. I agree that it probably scavenges iodine. However, the stoichiometric excess is such that it is difficult to be certain. If it were catalytic in iodine, then as an iodine scavenger would make better sense. I think we may also surmise the stoichiometry has not been optimized. It appears as though the inorganic reagents are inexpensive and if some is good, more is better.

[discodermolide]

Yes Dan, I was thinking along these lines but couldn't put it down as eloquently as you did!
I'll keep thinking about this little problem.

[polymer man]

Thank you for your help, I appreciate that,,,,

Many Thanks