This is a great tune to work out some new ideas on. It really highlights the limitations of the "what scale do I play" approach to improvising, but it gives you plenty of time to focus in on new strategies.
I was fortunate to hang out with the great jazz tenor saxist JR Monterose (of Charles Mingus fame) when I was starting out. He took me aside once and told me "You always play the right scale, but sometimes you get on the wrong side of the chord" It took a while for me to understand what he meant, but her's what I think he was going for:
There's basically 2 things that happen in an Iko jam. You go from D to A7, then you go from A7 to D. The D chord takes D major (aeolian), and the A7 takes A mixolydian, which are the same set of notes. Yet if you just play on a scale through the tune, you kind of come up short. This is because the melodies we're used to hearing on this tune depend on chord tones. On the D chord, locate the notes D F# A B in various positions, and do the same with A C# E G for the A7. When you're jamming, focus on getting to the chord tones on the downbeats ( the 1234) and use the other notes of the scale on the upbeats ( the ands) Then look at what happens when the chords change. The note A stays constant over both chords, and the other notes move by half or whole step. D changes to C# for example. Highlighting these changes will really bring out the melodies that we're used to hearing on this tune.
When you can confidently locate the chord tones, experiment with approaching them from above and below by one or two frets (trust your ear) and see what happens. Happy hunting................
Here's a quick clip of me practicing what I preach, with a Marchione neck-thru , SMS pre/Walter Woods and OD2R. (we're in a the more jazz friendly key of Bb)http://www.youtube.com/watch?v=t3wS_ntTv8Q