The PC guts seem boring and will inflate the price. Why not do a reissue with functionality closer to that of the original, based on the C64 DTV [1] which cost $20 or $25 when it was on the market, and sell it at a $50-to-$100 price point?
http://video.google.com/videoplay?docid=-1053309060448851979...
Amazing technical overview of the C64, including the latest in demo effects, in 64 minutes.