After trying different LOCs and tapping different sources I decided I had hit a dead end and the only logical next step was to disable ANC. There are two ways to do this - either by VAGCOM or disconnecting the four microphones in the cabin. I have no idea how to disable via VAG COM, so I tried to disconnect the mics.
They are very visible in the headliner of the cabin, so one thought was to get my hand in there and cut the wires, but I was reluctant to do such a thing considering the difficulty it would be to reconnect them. The other option was to disconnect them at the B&O module. SubterFUSE came to the rescue for me last night with the B&O wiring diagram which shows the 4 pairs of wires that are the four microphones going into the wring harness on the B&O system. Once I located the harness it was just a matter of counting pins and pulling the correct ones from the harness. The harness is actually very easy to take apart and with a sharp pointed object the pins slide right out and are easily slid back into place.
I pulled out the mic pins, re-inserted the harness, then listened for the annoying buzz. It's gone! No more buzz, and the system now sounds great. Took all of 15 minutes because I had never removed pins from a harness. If I get tired of the sub and amp or it's time to sell the car, the DIY is easily reversible back to stock and ANC is once again active.
Speaking of ANC, I was concerned that I would notice it not being active. I honestly can't tell the difference with it on and off. I tested various conditions this morning on the way to work while city and highway driving and I can't tell any different from before except one condition. On the highway in D mode I can now hear that the car sounds a little different when it goes into 4 cylinder mode. It's not annoying and the car could have easily come like that from factory and I don't think anyone would be complaining.
So there you have it. ANC is defeatable on B&O when adding an aftermarket sub and amp. The new sub just makes the B&O come to life - it really does. The B&O sub would distort when playing music loudly. Pics below:
The harness you want is the 32 pin harness with the orange latch:

The harness pulled out:

The four pairs that need to be pulled:

Everything back in with a view of the LC2i:

A big thanks to subterFUSE for the wiring diagram, without that I would've been reluctantly cutting wires.
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