Very clever, Graeme. I actually like the look of that a lot more than the sand-crusted one. Plus you don't have to smear it with sealant. I think you should keep a record of its "growth" and offer instructions in an article. This is one of the best loach cave ideas we've seen, IMO.
Just wondering if the stuff rots slowly? I have heard that having an air stone inside the cylinder will slow down the bamboo's breakdown and reduce the smell that it emits.