While stumbling upon different articles, I came across this video on YouTube of a guy in Shenzhen, China, that can replace the internal 16GB storage with a 128GB capacity NAND, so it's highly possible that a modified version of this is what's been done to the iPhone..
https://www.youtube.com/watch?time_continue=198&v=2bGb5AOwp4...
There's no doubt that the FBI could arbitrarily edit/replace the contents of storage, the trick is getting it to boot after that. That's why they wanted Apple's cooperation to sign code or hand over the code signing keys.
http://video.cnbc.com/gallery/?video=3000505023