@murlyn, I will expand on what Shawn said…
You can provide the embed when you edit your episodes into am embed box for PowerPress to display as your podcast. Go to PowerPress Settings > Episodes tab, and check the box “embed” and click save. Observe the sub-options below this as well, you can have the embed replace or complement the default player. This gives you the best of both worlds, the website player experience of your podcast via YouTube, but the syndication of the original mp4 video to podcast directories including iTunes.
As @shawnogordo said, to syndicate a podcast to iTunes you cannot use the YouTube link (YouTube has to host it on their website in order to inject ads into the content). presently mp4/m4v video is the standard for podcast syndication. Here are some H.264 (mp4/m4v) tips for podcasting video if you need them.