I found a cheap DSP solution that may work for this project. the AD1941 can mix 8-1 ( possibly even stereo outputs ) so I've ordered 1 of those along with the USBi programmer that works with SigmaStudio form AD.
The AD1941 version is I2C rather than the SPI ( AD1940 ) version.. I'll probebely kick myself for not going with the SPI version but I thought I better save some pins on the arduino !!
I also ordered an ADAU1446 which is a bit more complex in that it supports flexible audio routing on top of mixinng and effects. This chip works wth the same programmer and sigmaDSP software.
I think I will try the AD1941 first since it has less pins, no dought uses less power and can do the basic mixing. I will hopfuly be able to output 8 channels of audio over TDM from the ADC to the AD1941 then output the mixed channels from that to the DAC.
Volume controls should be able to be written over the I2C on the AD1941 so I can hook up the midi arduino this way rather than control registers in the DAC.
Luckly i'm building this as modular chunks so hopfuly I can just plug in the bits after I wire up the DSP.
more news shortly ....