2. "Which brings me to the second assumption; I'm doing this for the fun of working with other people to bring ideas to life, not to make money." I hate to break it to you, but when you charging money for your services, you are working for money and building a client-based business. You may not need the money, but your clients don't really care; they expect that when they cut you a $5,000 check, you're going to be 100% committed to delivering what you promised them.
3. "There's no reason I can't work something out with my clients. There's also no reason that we can't set up another two week iteration." How exactly do your clients "work something out" with you? Is it based on you loving their idea? What happens when the complexity of what the client is seeking increases? Are you going to make yourself available, or are you going to cut out and take on a $5,000 engagement that you can knock out without breaking a sweat? Again, your official pitch is wham bam thank you ma'ma.
I'm sure you're a nice guy Chris, and based on your background, I wouldn't be at all surprised that you're capable of building great things.
But...anybody who has been in this business for any length of time knows all too well about talented individuals who try to play the role of service provider but delude themselves into thinking that they don't have to operate like one. It's sort of like taking a job as a police officer, but trying to limit what type of calls you'll respond to in such a way that you're no longer doing the work of a real police officer.
Bottom line: when all is said and done full time contractors who align their interests with their clients are almost always more productive than "I'm doing this for fun" freelancers who think their impressive resumes entitle them to $xx,xxx/month in short-term client engagements.