James, after reading all the responses you have at the time of writing this answer, I strongly suggest trying to find another .com / .org and do the 301 redirect. That way you "might" have a minor short term loss, but you can regain the affiliation and be better off long term. I agree with Crimson and others, I would not go with the .io domain name. If you are targeting global, why not use a global domain. I hope this helps.

I agree with Tim and Adam and that said, sub-folders are better as a general rule of thumb for sure.

You might also want to refer to other similar questions here on SEOMOZ.

• http://www.seomoz.org/q/blogs-are-best-when-hosted-on-domain-subdomain-or* http://www.seomoz.org/q/setting-up-a-company-blog-subdomain-or-new-url* http://www.seomoz.org/q/blog-vs-blog

  and the post from Matt Cutts as well as the article from Rand that Adam mentioned.

  • http://www.mattcutts.com/blog/subdomains-and-subdirectories/* http://www.seomoz.org/q/subdomains-vs-subfolders