Is there anything to prevent one from contributing to a regular IRA (say $2000) in '98, then converting it to a Roth. This would appear to allow a '98 deduction for the IRA contribution ($2000) while only requiring an add-back to income of $500 in '98. Of course, you'd have to add $500 to income in each of the three subsequent years.

As long as you qualify for the deduction, and for the conversion, you can do it. It is a minor loophole.