I have had a similar issue since I got the truck, with no real success. The smarty-pants part of Sync is always trying to index the files, which I have a ton of on the classic (4,500+ songs). This makes it gag and defeats most of the search functions.
What I have done to defeat it as best I can, after going directly to Ford with not much other luck, is make several very long playlists. Usually, the voice search can at least do this, even while indexing. When the system totally gags on the Classic, you have to unplug it and do a hard reset on the iPod. I seem to have to do this about once a month or so. That's the best I've come up with so far. It will also usually skip to a new genre via voice command.
It's very frustrating that the system can't just treat it like a disc and navigate the files while it's indexing (like most other auto interfaces), but it can't. Like you, I don't want to give up all my music, and the best sound I've been able to coax from the stereo overall has been with the pre-equalized signal from the iPod. I have even tried burning all the files to a USB thumbdrive, and it still gags on the sheer volume of them. Carplay on the phone works pretty well, though, depending on the memory you have there. My next iPhone will have as much as I can get to try and solve this.
