(after encryption, at start-up you will get a message stating "unsupported filesystem" and the /dev/mmcblk0p1 will not be mounted)

This is in no way at all plausible deniability. It's a phone, which should mean you have personal data on it.

At the very least, it should have photos,fake contacts and a browser history on it.

IMO:
Xbox huge /home folder
Inside it, a relatively small loopmounted Truecrypt container/partition. ~/MyDocs is loopmounted, unencrypted vfat.
To mount the thing, you run a seekrit bash script that waits for a certain sequence of hardware commands from dbus (think opening/closing the ALS, slider, camera slider, battery cover)

Note: An empty device (no contacts and photos) does not make sense when you have 2 GB free space ;P