The main problem is that I went for a completely custom UI, layout, buttons, menus, etc... (for instance, currently the iPad version has about 1,100 individual graphics assets). The iPad/iPhone versions won't be scaled versions of each other - there would be too much compromise. Of course there is a good amount of code that is reusable. The app will be universal though.
My options would be (a) make the iPhone app feature-equivalent to the iPhone version and take longer, or (b) release a good, usable iPhone app faster and make it catch up over a number of updates.