I'm starting this thread in hopes that it helps others attempting the same thing do so without the trial and error that most incur. I'd like it to get a sticky on the thread and as more options become available we add to this list.
I came across a USB DAC that will allow you to output toslink from an iPad/Android tablet/phone.
http://www.parts-express.com/smsl-x-usb-dac-digital-audio-interface-with-dsd-support--230-236
How to use this with an apple device:
The only other items you will need are a USB camera kit 3 from apple and a car charger lighter port. This combo allows connection to the DAC and charging occurs via a lightning cable to the car charger. The drawback here is that it outputs at max 48kHz audio and most of the time it's 44.1kHz. Getting a third party app will not allow you to get around this. Apple has made it so the internal DAC cannot be bypassed.
How to use this with an Android device:
You will need a powered USB hub and a car charger lighter port. The powered hub allows both the device and DAC to get power. I've been able to play 24 bit/192 kHz audio files out the toslink port of the DAC from my Sony Xperia XZ phone just fine. DSD files require use of the iis port, which I have not looked into using.
I hope others find this useful. Ride on and enjoy the music.