After trying Kubuntu live CD, Fedora live CD, and booting from my Ubuntu partition on my iMac, I am convinced that there is no solution at all to the problems I am having recording from Line In. Using the same radio hooked up to an old Dell PC which I am selling, recording works fine. I can see the audio signal when I go to sound preferences and click on the Input tab. Works great.
For some reason I beleive that Ubuntu just isn't compatible with the sound card in the iMac. This is too bad because I was really hoping that I could use Ubuntu dual boot on my Mac. Running Ubuntu in emulation works fine using VMware Fusion but dual boot really sucks. Unless I hear back from someone who actually is running Ubuntu dual boot on an imac and can record from the Line In, my hope of ever finding an answer is quickly slipping away and for me, that is pretty sad because I love using Linux and really wanted it to work for what I wanted to do.