Well, I would start by assembling a Z80 (or 6502)-based machine (because I know the toolchain, it's widely available, and something like an atmel's got so much

Well, I would start by assembling a Z80 (or 6502)-based machine (because I know the toolchain, it's widely available, and something like an atmel's got so much built in that it almost defeats the point). Then, I would cheat (slightly), by speaking SLIP or PPP down a serial line to a router of some sort, thus avoiding the CAT5e problem. But no more cheating! From there on out, the chip will receive no external assistance of any sort. Or you could just use a newer chip, and avoid this sort of problem altogether.