Hello, interesting your project, but i don't understand what do you whant to do with Arduino, a piggyback ECU or a standalone ECU (how megasquirt)?
i'm not an arduino expert, just learning, but i know a lot about ECUs and engines (i'm a professional ECU installer/tuner) and fascinated with the possibility to make someting like a own ECU, but i'm realist, i don't have the knowledge required to program a firmware, this is the hardest part of a project like MS, but like the possibility to learn from this amazing Open Source ECU!!
About making a piggyback ECU, i think is possible and not soo hard for a regular/good arduino user, this is one of my future projects with this platform, for the moment, i'm working in a boost controller for VNT turbos, with the learnings of this project, i will have more knowledge and practice to initiate a more complex project like the piggyback ecu. I'm too interested in a project of making a 1 cylinder 2 stroke engine EFI (only fuel injection) with others peoples here in italy, but more and more experience i will need for that.
if do you need some help, don't esitate to ask me, 
PS. sorry for my bad english!! 