Minimig in a PSP case? It is possible

[freqmax]

If you have an FPGA I don't really see the need for any MCU (ATMEGA128) controlling the LCD (you mean TFT?), why would an MCU be needed ..?

I have even checked the possibility of driving DVI/HDMI or even raw tft LVDS directly from an FPGA. It's seem perfectly doable. It would rid the need for any resistor D/A.

[freqmax]

Those Portable DVD players aren't so expensive these days..