I've been down this road before... to me, it was SO not worth the trouble. That seperate ground loop is for the pressure sensitivity, EVEN if the pad you're using isn't pressure sensitive. It's probably in some kind of lame Microsoft specification.
The Duke controller will work somewhat with a common ground, because it uses a different design to create the pressure-sensitivity in the buttons. But it's huge and hard as hell to solder to.
But like a Playstation pad, you should NOT remove the analogs, OR the analog L/R triggers. If you remove the potential they are kept at, without replacing it with a similar circuit (which I'm too stupid to know how to build), they will completely screw up the controller, because the button matrix is tied into the analogs through the chip that condenses the inputs.
Any other XBOX controller I've seen will not work with common ground, and that includes Controller S, 3rd party crap, and the Capcom SF Anniversary pad AND joystick. I have wasted a lot of money trying to make a viable converter from my Neo sticks. At the end, I was thinking of wiring up some kind of circuit, with relays, for those "special" buttons, but it was beyond my level of expertise. And all the wasted time had pushed me into a new level of frustration.
So if you want it to work properly on xbox, you either have to make some kind of fancy circuit to work around the pressure sensitivity (beyond me), or wire those six buttons directly with their own ground wires. That, or someone has to program a chip as an XBOX interface with a common ground and no pressure sensitive inputs. If I had free time now, I'd learn, but I don't, so some awesome electrical engineer has to do it for us.
Sadly, it'll probably never happen.