I think your earlier assessment of them getting around the passcode lock was pretty good. Again, read the court order, it doesn't mention any form of encryption. It just asks for "reasonable technical assistance" to disable the automatic locking/erasure of the phone. Really I think the government can already do this, but they just want to CYA on the slight chance that they mess up and brick the phone. You might also think it was significant that the government did NOT ask about breaking encryption. Going back to my earlier (admittedly poor) analogy, it would be like saying, "just turn off the security system, we've got our own lock-pick and nitroglycerin".