Whew, I am now at a point where I think I can move ahead. I have worked out a set of instructions (not set in stone) that I think will work. It's definitely not orthogonal. Without complicating the design by adding the ability to have 2 instruction registers or greatly simplifying the instruction set, I can't see a way of doing it.
The instruction syntax I am suing is "INStruction Source,Dest" e.g. MOV A,$D020
I think it has some very useful instructions. XY Can be used as another stack pointer. I didn't have to room to allow AB to be used as a pointer directly, so only XY can be used for register indirect instructions. One instruction it does not have is clear, so no direct way to clear the status register. You can XOR A with itself (should be 3 cycles) then MOV A,SR (2 cycles). Or if you can't use A, you can XOR a byte in RAM with itself or use a known zero location.
I have yet to receive enough parts to actually start building anything. I've ordered parts from several different vendors trying to get the best prices. With all the shipping charges though I'm not sure If I actually saved anything.
I have in instruction matrix on the google docs spreadsheet