I've thought about it, but to do it properly on classic systems, I believe you'd need to use a combination of virtualization and emulation to maintain system timing. You'd replace the system-level bootstrap code with hypervisor code that bootstraps and starts Exec in a VM partition, presenting the user with the usual insert-disk animation. You could provide an early startup menu similar to the built-in one for managing VM partitions, storage, etc.
On newer PPC-based systems, you'd probably just want to use an off-the-shelf virtualization product (or a PS3) and write the OS4 startup code, kernel modules, and drivers necessary to support the virtual machine.