Know the tax consequences of a 401k to Roth IRA Conversion

Wow. I've been waiting for a certain financial stock to come back up from the bottom of the barrel in order to do my 401k to Roth IRA Conversion. My thinking was that since Roth contributions are post-tax dollars, and you can withdraw them without penalty after five years, that it would behoove me to wait until I could maximize the amount of my holdings at the time of the conversion.

So the stock's up today and I'm on the phone with my 401k people. I want to be sure they take taxes out at the time of the conversion since I got rheemed on this once before (when converting from 401k -> IRA -> Roth). They tell me this isn't possible, that the only way to get any money to the Federal Government is to say, convert 80% of the assets and sell 20% and take that out in the form of a distribution to yourself. However, I was told that I would have to pay the 10% early withdrawal penalty for the privilege of handing that money over to Uncle Sam. I huffed. I puffed. I tried to be nice on the surface, though, when I asked to speak to a supervisor. I gave him the old "I used to work in the industry and I did this kind of stuff all the time and I know what I'm talking about and you're full of it" routine. But in a nice way, of course. I ended up thanking him for his time and putting off the conversion for another day to allow me to do some research.

Holy shat! They were right! According to the Kiplinger Article The IRA Shuffle: From 401(k) to Roth IRA from February of 2008: (emphasis mine)

But don't try this strategy unless you can afford to pay the tax bill with funds outside your 401(k). Tapping your retirement account to pay taxes would mean owing an early-withdrawal penalty if you withdrew the money before age 55.

Who has money just lying around to account for the sudden influx of ordinary income that would result from this type of conversion? Not me! I'm not sure - but I think I might be up a creek without a paddle. :|
Oh well, if the stock dips down again at least I'll be able to take comfort in the fact that I'll be taxed on much less money if and when I ever decide to proceed. Take heed!