> Just as an aside, I would actually be more willing to undertake this type of interview if you weren't paying me.

Sure, and I don't think I would force pay you. Would offer you the in person option, or the homework option without pay. Could maybe work it into a signing bonus if you took the job or something? Definitely not looking to put someone into an ethical dilemma, but not wanting to be one of those companies who makes candidates do really long take home interviews and then makes them mad when they don't extend an offer.