Sorry for my confusion, but does removing the driver dildo only serve to improve the sound?
With the distortion readings is there significance to the 2nd order harmonics measuring a higher distortion as opposed to higher order harmonics?
Lastly, is the measurement considered bad because of the 4% distortion at 4K and 5K frequencies?

Removing the driver dildo helps with what I found to be a strangely incoherent soundstage where certain parts of the spectrum sounded more restricted than others. 

But I would only recommend modding them if you already like them stock.  If you don't, then just move on. 

Warnings for modding them:  the screws from the baffle can get sucked into the driver by the magnet, as they will fit through the baffle holes.  So keep loose screws away from the baffle.  The baffle ports are also covered with a very thin film which could easily be pulled off or damaged.  And there is a cable that connects the baffle to the cup, and which you could pull apart. 

Hello all, nice forum you've got here!

For those of us who still like the K550 regardless of their issues, here is another mod that is worth considering:
Instead of removing the dildo entirely and damping the entire enclosure, just damp the inside of the dildo. I tried cotton and the material used in Koss PortaPro earpads. Both work pretty well. I found that it does slightly reduce the harshness of these headphones. It also does make some sense - there is a bass port on the dildo which is probably there to reduce bass frequency energy buildup by releasing those frequencies into the big enclosure. This is also what gives the K550 that two-layer soundstage sensation - the bass seems more spacious because it is allowed to escape into the enclosure. Meanwhile, the higher frequencies remain trapped in the dildo and this is what causes the ridges we see in CSD plots - the mids and treble bounce around within the dildo and some of that energy is audible. By damping just the dildo, we reduce some of that energy buildup.

Mind you, the change in sound introduced by this mod is pretty minor; however, I definitely hear less of that plasticky or 'zazzy' quality that these headphones exhibit before the mod.

Hope this helps some people out there and forgive me if some of the above explanation is incorrect or misleading - I am not an engineer, just a headphone enthusiast.

Fair enough, although I do have to admit that I like these headphones a lot and I do listen to tonnes of rock and metal music. To be honest, I didn't find them too offensive stock (they are a bit harsh but I've heard much much worse) and now I find them quite pleasant.

There is a hole at the bottom of my dildo, I am certain of it.