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If the ground loop isolator contains a 1:1 transformer, which they most likely do, then reversed installation will not cause any problems.
Ground loop isolators are pretty cheep, so give it a shot. However, they will reduce the quality of the signal and most likely reduce the highs and muddy the base response. You are better off trying to power and ground your iPod from the same source as your head-unit. This should get rid of any noise created from a ground loop and not effect the sound. This may sound easier than it really is, as it will require you to tap into the power and ground coming from your stock stereo harness.
Good luck..
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