device selection for game system

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I'm working on implementing a custom game boy advance cartrige with
the following features:

 - 4-16MByte flash rom (bank switched to a 24 pin buss)
 - 32kbyte save ram (game state save, can be stored in flash rom if
needed)
 - usb-to-pc link
 - in system reprogramability via usb
 - hardware assist for MP3/OGG decoding or similar lossy compression
  (target compression is 8bit, 2-8Kbit/sec, for 30min of audio in
2mbyte of rom)

Space is a huge concern, my target board size is 1x2 inches.  Plus my
target cost in quantitys of 1,000 or more is $10-$15 total for the
board and everything.  Im looking at using the intell strata flash
roms at ~$8 for a 4MByte chip in quantitys so that only leaves me
~$2-$7 for my remaining logic.  To keep costs down as well as size Im
looking on implementing the rest of the logic in an FPGA or CPLD.

Currently Im looking at the Altera MAX 3000a series of chips.  Is
there enough power in the max chips to do what I want?  What chips
would you recomend?  Should I just implement the controll logic in an
ASIC and pick up an Atmel 8051 for the USB and MP3 decoder?

thanks for your time,
   David Tucker

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