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Ian Holm was utterly fantastic as Bilbo in each and every scene in LOTR save one. The one exception being the finding of the One Ring where he simply could not disguise his age. Ten years has past since that filming and those ten years are the most difficult for an actor. Plus Holm has had health problems. He would have to play a more physically demanding role and appear younger than he did in LOTR.
Face it - its just not in the cards.
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