Could a small CPLD device do the stuff that needs to be in hardware? - I don't know how complicated it needs to be but the Xilinx 95xxXL CPLDs are very cheap.
Remember though that a lot of USB devices like keyboards and mice actually speak both USB and PS/2, and come with a simple pinout adapter (I dont know if the pin mapping from USB to PS2 is standardised for these devices), so you may be able to get away with the much simple PS2 interface, even if the device has a USB plug on it.