I decided to skip the Arduino UNO prototype and move directly to my ATtiny85 prototype.

I'm still new to Fritzing....

and the result 

What I found was that everything worked well.  I ran down a few issues with the original code to read the shift register and determined that some delays were not necessary.  My code was based off of this design discussed in an Arduino forum. http://forum.arduino.cc/index.php/topic,8481.0.html  Serial output has continued to elude me and I don't have an oscilloscope so I must settle for what I can get; for what it's worth I think it's fun and I hope my kid will like it.  My only complaint is that the speaker isn't loud enough.  From here I'm going to explore a few other speakers and determine how much I need to shave off of some of the components.  For example, the coin-cell battery holder needs to be half it's height to fit so some rework needs to happen.  I'll take some more pics after I carve out some room in the NES controller.