I've got his disposition maxed out, I've used the Voice of the emperor along with whatever other charms I've got in the inventory and absolutely cannot budge him past saying: "I've never laid a hand on her, etc". I'd really like to kill the little twerp but I really want to get the recommendation for the Mages Guild, too. Can I just go to Soris Arenim and steal the thing and give it to Kud-Ei to get the recommendation?

Odd that he won't progress his dialogue. Anyway, stealing the staff is an acceptable way of obtaining it from Soris Arenim. I doubt you'd actually need Varon to tell you about it in order to finish the quest, so I'd suggest just skipping that step.

Good, thanks for that.