all alcohols will be soluble in water (that pesky hydroxyl group), large enough alcohols to precipitate out of solution will not be made by small organisms (the single chain high MW ones we want).

You can attempt to complex them, but the complexes must be recoverable and economical to produce (this is shifting the buck). Anything which complexes a simple CCCOH will also probably complex with H2O or be serverely messed up by its presence. Any other alcohols present will also complex.

dna modification is in its infancy. We actually do nothing truely difficult. We observe in nature and then cut and paste.

See a gene you like? chop it out, splice it into a bacteria, and see what happens.

There are no human designed proteins or reaction chains currently which produce anything. Monsanto probably has the most advanced private labs in the world with regards to this. The best they have come up with is a crop which is sterile the next season.

I'm not suggesting that we can solve this problem in a reasonable way in the short term but these types of problems are ones that will fall to a 20-30 year effort.

And I think the goals will be different since over this time period we will convert to electric completely outside of the airline industry. And even here we may see a move to fuel cells for a lot of flights.

It's important to understand I don't give a rip about people thinking of creating liquid fuels to keep the current economy going this a waste of time.

But even in the brave new world of the post oil economy we need liquid organic fuels and probably more important feed stocks for chemical synthesis. And I'm sure that the people of this period would treat using fossil fuels with the same horror we do for nuclear now.

Now for these uses cases you don't want to waste good farmland or the edible part of the crop so your looking at cellulose IMHO.