Perhaps Michael Sheen would fit the bill-bo.
I could definitely see him playing a Hobbit - good idea.
After playing Kenneth Williams, David Frost, Brian Clough, and Tony Blair, I don't think it would be too much of a stretch for him to take on the furry footed one. Facially, he's not that dissimilar to Ian Holm.
I was thinking about that last part. He definitely could pull it off if he wanted to.