Set up the breadboard with two CD4021 shift registers daisy chained:
Next flashed the default Arduino firmware to the ATmega16U2, loaded the sketch in debug mode then fired up the serial monitor:
Register #0: 254-11111110 Register #1: 127-1111111 Note ON 1-7: 51 Register #0: 254-11111110 Register #1: 255-11111111 Note OFF 1-7: 51
Success! The daisy chained shift registers work perfectly, I get the MIDI note ON & OFF messages as expected in the correct order.
I loaded the Hiduino firmware and connected the Arduino to a MIDI monitor, again the notes were being sent as expected:
Next step is to send the shield PCB off to OSHPark to be manufactured!