Chris,
Maybe you can try a purely analog demodulation using this inequality
sqrt(i^2 + q^2) >= max ( abs(i), abs(q))

The max can be done with an op amp comparator circuit, comparing the two 
voltages and selecting an analog multiplxer for the output. 

For the abs(x), I suppose that one can just compare the x with 0 and 
have the op amp select x or -x, where the later comes from an unity gain 
inverting amplifier. 

All of this would take 5 op amps and three multiplexers.

Another math inequality which may work for AM demodulation is:
sqrt(i^2 + q^2)<= abs(i) + abs(q) 

It would be best to try these out in Matlab or C, measure the SNR before 
trying the circuits.
Frank



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