hey Jim,
I really dont know to much about recording, but i have made some good songs in the MacGyver stlye recording method, (a 1/4 inch cable and a blender). I have really noticed as well about the bass boost when you transfer over to a final mix and play it on outside sources. One thing, that i agree with you, is that headphones are decieving with the levels of bass...I think they will fool you all the time. My "monitors" (really home theater speakers) are cheap Yamaha NS-A636, 100 dollars for a pair, and they seem to do the job well. I think McGyver recording method is great..and staring at the musicians friend magazines saying "hey i wish i had that", and then figuring out how long it will take you to earn it may stink, but when you get it, it makes it even better!
Another question, does this mean to flatten, just turn off all EQ, and turn the volume all the way down..?