The problem with only looking at modern sources to explain the Book of Mormon is that it leaves one blind to the abundant evidence of ancient origins. A fair evaluation should consider the Book of Mormon in the context it offers and determine if it is plausible and weight how the evidence for ancient origins compares to other theories.
Rick Grunder has found a building, a river, and an iron rail, and feels he has an incredibly compelling case. The same case could have been found in many cities of the world, for cities tend to be built on rivers, and tend to have buildings, including buildings at least four stories tall, and iron rails are found all over as well. The question, though, is whether something like an iron rod could have been known in antiquity, It doesn't need to have been used in ancient cities, but needs to have been a concept that could have been understood in a dream with spiritual significance. In the comments section, RT points to the purported problem of the iron rod and suggests that is is clearly a modern concept:
In my view, the strength of the parallel relates to the conjunction of a long rod of iron and narrow path, a large swift flowing river and nearby falls ("terrible gulf"), and an exceptionally large and lavish building nearby. The appearance of a rod of iron in this setting is particularly important, since it is clearly not an ancient motif. There were no rods of iron set next to rivers at the time of Nephi in the Old World. I have always wondered where the notion could have come from, and so its presence here in a setting highly evocative of Lehi's dream and at a place JS is known to have visited is difficult to ignore.Is a rod of iron a nineteenth century concept? Is it impossible to have been used in a divinely inspired vision in 600 B.C.? First realize that iron itself is not the problem. The Iron Age was well underway in Lehi's day. Even the "fine steel" of Laban's sword is not anachronistic, as some critics have claimed (especially those in the first few decades after the Book of Mormon, before the history of iron became better known), though high-quality steel could be rare and precious. So the problem raised by RT appears to be not the iron itself, but an iron rod. There were iron knives, iron swords, iron tools, iron cups, iron beds, iron yokes, etc., but is the concept of an "iron rod" so out of place in Lehi's day that it would have been unintelligible to him, like, say, showing him a 64 gigabyte flash drive of fine germanium-doped silicon holding zillions of sacred words? (Sing with me now: "Hold to the drive, the silicon drive...." Care to complete the lyrics for a little added glory?)
Actually, the term "iron rod" occurs in the KJV Old Testament in Psalm 2:9: "Thou shalt break them with a rod of iron; thou shalt dash them in pieces like a potter's vessel." It's not just a quirky KJV thing. The NIV also has "iron rod" while the NASB has "rod of iron."
Jeremiah 1:18 also speaks of an iron pillar: "I have made thee this day a defenced city, and an iron pillar, and brasen walls against the whole land...." The brass walls coupled with iron pillars (rodlike elements?) defend the city. The Hebrew word translated here as "pillar" can also be a platform or scaffold, according to Gesenius (see BlueLetterBible.org), so could this include a fencelike function? Probably not. However, structural iron elements should not be unrecognizable to Lehi, including iron structures used to protect people.
But I agree with RT in that I'm not aware of any ancient rivers in the Middle East that had iron rods along them, but that does not mean it could not have been an intelligible concept in a dream nor does it require that we look to modern sources for the concept of an iron rod. Given the presence of iron in Lehi's day and specifically of reference to an iron rod in Psalm 2, as well as other structural iron features in the Old Testament, iron in the form of a rod appearing in nothing more challenging than an archaeologically benign dream should not be overly puzzling.
What I hope is more puzzling to RT is the association of a "rod" with the "word of God":
I beheld that the rod of iron, which my father had seen, was the word of God. (1 Nephi 11:25)
And they said unto me: What meaneth the rod of iron which our father saw, that led to the tree? And I said unto them that it was the word of God; and whoso would hearken unto the word of God, and would hold fast unto it, they would never perish. (1 Nephi 15:23—24)How does a rod equal the word of God? Isn't that rather odd?
This concept may not have just been an on-the-fly blunder inspired by a last-minute glimpse of an iron fence on an aqueduct. In my previous post, I mentioned that elements from Lehi's dream appear to be interwoven in the remaining text of the Book of Mormon, which was written before 1 Nephi. One of those elements is the idea of "holding" onto the word of God, as in Helaman 3:29-30:
 Yea, we see that whosoever will may lay hold upon the word of God, which is quick and powerful, which shall divide asunder all the cunning and the snares and the wiles of the devil, and lead the man of Christ in a strait and narrow course across that everlasting gulf of misery which is prepared to engulf the wicked --Here language is used that echoes Nephi in several ways. In addition laying "hold" on the word of God, like the iron rod, we learn that it serves to lead one in a straight course to eternal life (like the tree of life) and to avoid the "gulf of misery" that Nephi also speaks of (2 Nephi 1:13, possibly building on the "terrible gulf" of Lehi's dream in 1 Nephi 12:18 and the "awful gulf" of 1 Nephi 15:28; cf. Alma 26:20 and Hel. 5:12). The dangerous journey to eternal life is made possible if one will "lay hold upon" the word of God and pursue its straight and narrow course. The iron rod theme seems to have been part of background in Helaman 3, and this not readily explained by something Joseph saw well after dictating Helaman. But where does this concept come from? A random creation from Joseph inspired by some other modern scene in Rochester or elsewhere?
 And land their souls, yea, their immortal souls, at the right hand of God in the kingdom of heaven, to sit down with Abraham, and Isaac, and with Jacob, and with all our holy fathers, to go no more out.
Hints of something more come from John Tvedtnes in "Rod and Sword as the Word of God," Journal of Book of Mormon Studies 5/2 (1996):
The use of a rod to represent words or speech is found in Proverbs 10:13 and 14:3. In other passages, it refers specifically to the word of God. In Isaiah 30:31, “the voice of the Lord” is contrasted with the rod of the Assyrians. In a few passages, the rod is compared to a covenant with God which, like a rod, can be broken (Ezekiel 20:37; Zechariah 11:10, 14). Micah wrote, “The Lord’s voice crieth unto the city, and the man of wisdom shall see thy name: hear ye the rod, and who hath appointed it” (Micah 6:9). Isaiah wrote of the Messiah, “But with righteousness shall he judge the poor, and reprove with equity for the meek of the earth: and he shall smite the earth with the rod of his mouth, and with the breath of his lips shall he slay the wicked” (Isaiah 11:4). A similar thought, obviously based on the Isaiah passage, is expressed in a modern revelation in which the Lord threatens to punish the unrepentant with “the rod of my mouth” (D&C 19:15).Even more interesting information came later from Matthew Bowen in "What Meaneth the Rod of Iron?," Insights 25/2 (2005, footnotes omitted):
Further support for the antiquity of Nephi's imagery is detectable in his own comparison of the word to a rod, a comparison that may involve wordplay with the Egyptian term for "word" and "rod." Although we have the Book of Mormon text only in translation and do not know the original wording of the text, we can use our knowledge of the languages that the Nephite writers said they used—Hebrew and Egyptian (1 Nephi 1:2; Mormon 9:32—33) —to propose reasonable reconstructions.
We note that the Egyptian word mdw means not only "a staff [or] rod"2 but also "to speak" a "word."3 The derived word md.t, or mt.t, probably pronounced *mateh in Lehi's day, was common in the Egyptian dialect of that time and would have sounded very much like a common Hebrew word for rod or staff, matteh.4 It is also very interesting that the expression mdw-ntr was a technical term for a divine revelation, literally the "the word of God [or] divine decree."5 The phrase mdw-ntr also denoted "sacred writings,"6 what we would call scriptures, as well as the "written characters [or] script"7 in which these sacred writings were written.
Now consider Nephi's comparison of the word and the rod in the context of the Egyptian word mdw:
I beheld that the rod [mdw/mt.t, Heb. matteh] of iron, which my father had seen, was the word [mdw/mt.t] of God.8 (1 Nephi 11:25)
And they said unto me: What meaneth the rod [mdw/mt.t, Heb. matteh] of iron which our father saw, that led to the tree? And I said unto them that it was the word [mdw/mt.t] of God; and whoso would hearken unto the word of God, and would hold fast unto it, they would never perish. (1 Nephi 15:23—24)An indication of Nephi's awareness of the play on words is his use of the expression "hold fast unto" the "word of God," since one can physically hold fast to a rod but not to a word (compare Helaman 3:29). Nephi's comparison of the rod of iron to the word of God also makes very good sense in light of other scriptural passages that employ the image of the iron rod.9 But the comparison takes on even richer connotations when viewed as a play on multiple senses of the Egyptian word mdw. Since Lehi's language consisted of the "learning of the Jews and the language of the Egyptians" (1 Nephi 1:2), we would reasonably expect that Lehi and his sons (Nephi in particular) were aware of, and probably even used, the common word mdw/mt.t in at least some of those senses. It seems unlikely that the word's phonetic similarity to Hebrew matteh would have escaped their attention. On the contrary, it would plausibly explain Nephi's apparent substitution of "word" for "rod" in later remarks to his brothers in 1 Nephi 17:26, 29: "And ye know that by his word [mdw/mt.t] the waters of the Red Sea were divided. . . . And ye also know that Moses, by his word [mdw/mt.t] according to the power of God which was in him, smote the rock, and there came forth water."10
Nephi's imagery itself, along with its possible Egyptian language wordplay, further attests the antiquity of the Book of Mormon. Certainly Joseph Smith in 1829 could not have known that mdw meant both "rod" and "word." However, Nephi, in the early sixth century BC likely had a good understanding of such nuances, and he may have employed them as part of a powerful object lesson for his brothers.Like the white fruit of Lehi's dream, which impressed non-LDS scholar Margaret Barker with its ancient connections to documents Joseph Smith could not have known about ("White Fruit and a Guiding Rod" in The Worlds of Joseph Smith (Provo, BYU Press: 2006)), the ancient Semitic connections around the iron rod symbolism in the Book of Mormon are also rooted in antiquity and deserve more consideration than simply ascribing it to inspiration from a common modern setting (building, river, railing, all in the same city, no less). It requires more explanation than just assuming that the writings of Nephi must have been made up on the fly, inspired by last-minute ideas Joseph picked up a few days before completing the Book of Mormon from a his late visit to Rochester, a visit so late that the Book of Mormon was probably already finished. Given the evidence from the text of the Book of Mormon, that theory of fabrication is a pipe dream, and if iron, then a heavily corroded iron pipe dream, far more fanciful, far more modern, and far less enduring than Lehi's.
Update, 5/31/2016: Criticism about the rod of iron as an anachronistic structure to me seems to draw upon our modern views of iron railings. We assume that the rod of iron is a nicely anchored, stationary railing made according to modern standards, nicely cemented into place with supports ever 30 or so centimeters. But the rod of iron in Isaiah 11:4 is used for smiting, a rather dynamic act, and when Mormon appears to refer to the iron rod and other themes from Lehi's dream in Helaman 3:29-30, he urges us to "lay hold upon the word of God which is quick and powerful, which shall divide asunder all the cunning and the snares and the wiles of the devil, and lead the man of Christ in a strait [straight] and narrow course across the everlasting gulf of misery..." The word, which we must hold, is "quick"--alive, active--and can "divide" (perhaps chop up, whack, or smite) the artifices of the Adversary. This suggests motion, the kind of motion you might get from a rod that is being wielded by a divine agent. In leading us to salvation (or to the tree of life), perhaps its action is also more than merely a passive support. Perhaps the iron rod is pulling us or actively moving us in the right direction. It actively wrecks Satan's deceitful artifices while bringing us, perhaps vigorously, to our goal. Well, it's a dream. We're not sure what he saw. But importing modern images into the dream and then declaring that the dream seems too modern may be a bit fallacious.
The possibility of the rod playing an active, dynamic role is not just Mormon's idea in Helaman 3. Nephi, in explaining the significance of the rod of iron to his brothers, states that "it was the word of God, and whose would hearken unto the word of God, and would hold fast unto it, they would never perish; neither could the temptations and the fiery darts of the adversary overpower them unto blindness, to lead them away to destruction" (1 Nephi 15:24). Thus, as Tvedtnes has noted, "This makes the rod both a source of support (as the word of God) and a weapon of defense against the devil’s 'fiery darts'...." Nephi's concept, nicely built into Helaman 3, suggests the role of the iron rod is more than just a static railing.
If the rod Lehi saw was an exaggerated iron scepter, a symbol of God's power and also of the word of God, building on the clever wordplay suggested by Matthew Bowen above, then in the dream it could have served as a barrier/railing but also as a dynamic tool to protect people and draw them home. Lehi doesn't say it was anchored, just that "it extended along the bank of the river and led to the tree" (1 Nephi 8:19). There was a path along the rod of iron (1 Nephi 18:20) and since a path is static, the rod may have been, but this is not necessary. The people who reached the tree of life "caught hold of the end of the rod of iron" and then pressed forward, "clinging to the rod or iron" (1 Nephi 8:24). So it had a finite length, and the key was grabbing the end of it and holding on. That makes sense for a static structure, but need not be, especially in a dream.
What if we compare the rod of iron with another metallic symbol of power, a sword? As we can see in Vol. 4 of Skousen's online Critical Text of the Book of Mormon, 1 Nephi 12:18, which currently has "the word of the justice of the Eternal God" serving to "divide" the wicked from the blessings of eternal life, but Skousen shows that this was a mistake and it should be the "sword of the justice of the Eternal God" that is doing the dividing, which is more logical and consistent with ancient usage and with the dividing action in Hel. 3:29, though there it is the word of God carrying out that action. As Tvedtnes has pointed out, rods, swords, and the word of God may all be connected.
Another connection occurs in 1 Nephi 15:30, when Nephi explains "that our father also saw that the justice of God did also divide the wicked from the righteous; and the brightness thereof was like unto the brightness of a flaming fire,..." The bright, flaming justice of God, a sword (as originally in 1 Nephi 12:8) that divides or separates the wicked from the tree of life, here appears to draw upon the image of the cherubim and flaming sword of Genesis 3:24, placed there by God "to keep the way of the tree of life." The "way" is derek, Strong's H1870, which means road, path, etc. I think Lehi's dream builds on that concept nicely, and we Latter-day Saints may have overlooked this connection to Genesis. We don't know the details of how the dream was presented and if Lehi saw a rod and a sword at the same time, far apart or somehow related, but his dream and Nephi's version were fairly sweeping with many features and scenes.
One of the most interesting aspects of the dream is the relationship between its stages and the three stages of the Jewish temple. This goes far beyond anything Joseph could have concocted, in my opinion, and nothing in Rochester would have helped here. See my first post on this, "A Temple Gone Dark."
There's much more to the iron rod than meets the modern eye, and much more to the Book of Mormon's use of that theme than Joseph would have gleaned from a quick glance at a Rochester aqueduct in his frantic final moments of dictating the beginning of the Book of Mormon, a beginning that is interwoven in many ways with the rest of the already-dictated text. The alleged weakness of an anachronistic iron rod structure in Lehi's dream may actually be a strength pointing to sophisticated usage drawing upon ancient concepts and even Semitic wordplays. The theory that Joseph came up with Lehi's dream almost as an afterthought in the last few hours of dictating the Book of Mormon just doesn't work.