[danshaffer]

we've talked about doing something like this...
one way you could try doing this is with n-bit counter chips, attaching an LED to each bit of the counter, then count up on the counter until you get to the state you want. processor should be able to do it faster than you could notice, although using 4-bit counters doesn't expand your ability too much.

i'm no EE, but if someone who is could critique this idea, that would be awesome:

you arrange your LEDs in a matrix, with one end of the diode connected in each column to every other in the column and the other end of the diode connected in the row to every other in the row. each row and each column's continuity is controlled by a transistor, so closing the transistor on a row and a column will complete the circuit. not sure how you'd deal with the current requirements of LEDs to avoid blowing them or anything, or if this will work at all, but just throwing it out there. i could probably draw a schematic if my description wasn't clear...