HDCP should not change the video data in any way once properly decoded. Yes, it is extra baggage to carry alomg but it's not going to affect image quality. Now 480i HDMI technically should not contain HDCP because it's under the maximum unprotected resolution limit. However I do agree many manufactures will not think this out and will just apply HDCP to anothing leaving the HDMI port.
As stated SDI can (and does in many professional installations) carry 4 full bandwidth (48khz) AES channels. HDSDI can actually carry 16!
What leaves the MPEG decoder chip in "modifiable" players is either a Bt656 or Bt601 8 bit parallel stream with a clock line. A Bt656 stream can simply be serialized with a single chip. A Bt601 stream must pass through some logic to add the EAV/SAV words which imply H&V sync. Generally an FPGA but I remember the days in the early 1990s when this was a PC board area the size of a business evenlope to do this with TTL chips and some crude programmable logic!
SDI is a true unbalanced serial interface needing only a sigle wire and a return wire - coax. Twisted pair is entirely possible but no standard exists for it's use. I have seen a demonstration by Belden carrying SDI over a single CAT5 pair.
HDMI is not fully serial inthe same sense. While the individule data channels, Y,pB,pR
rae serial streams, there are three of them along with a clock. These four signals are balanced LVDS signals. So HDMI is also a PARALLEL
interface in a sense. The problem is data skew. On a long cable it's not possible to make the fuor pairs exactly the same physical legnth. At some point this delay causes data skew. At worst case a data pair may actualyy be delayed into the next clock pulse resulting in visual chaos.
SDI is far more robust than HDMI. It can travel much greater distances over inexpensive cable.