Just a quick update on this, it seemed to me that DNS is a little bit complicated for most people and those most likely to make use of this, such as those using FreePBX etc, might need a little extra help implementation wise. In the current form it can only be used directly from the command line, but I'm willing to work with others to integrate this with their software.
That said I extended the proof of concept to be a full dig replacement, well more or less, it has a rather limited number of DNS types implemented, the same number that e164.org supports funnily enough
The coding is done in the simplest way possible so that everyone should be able to pick it up and use it, obviously PHP code isn't the most efficient, at least when the code has to be started up over and over. If on the other hand it is being run as a daemon or fast-cgi/agi or as a module in something else then that is a different matter.
So if anyone is the slightest bit curious for a fully working cryptographic DNS request/reply example, I have posted the full source to the wiki:
DNS Encryption - e164.org Wiki