Today I did some searching around the web for different parts and comparing different phones and cases. Did some baby testing with the phones and cases I have lying around and I think I like the one for my Lumia 925 best. The size is just about right for grabbing and holding. It seems to have a nice tooth to it too (at least according to test subjects :)).
Looking at sourcing 3.5-4.5" TFT LCD's and after some testing with different materials for screen protection I'm thinking of using 2-3 layers of thiner lexan to provide flexibility and durability.
One item that really caught my eye as a starting point is this 3.5" TFT display on Amazon for $15 US (http://www.amazon.com/3-5-Inch-TFT-Monitor-Automobile/dp/B0045IIZKU/). Price is right and the form factor fits in what I'm looking for. Would have to (obviously) remove everything but the screen and driver components, but I'm sure that won't be too difficult.
Since it already has video in might even be able to easily drive it with a small ARM package.
Also decided that my budget "goal" is <$30 for the prototype. Figure if I can hit that with off the shelf components then it is easily in reach of the average hacker.
Really need to figure out how to post pictures after creating my project. Anyone have hints on that?