Should you do this again, things would have been far cheaper with an 8 pin ATtiny and a shift register with 8 LEDs, setting them isn't hard with one SR, the parts are more easily (and cheaply) replaced.. Etc
Depending on the final use (driving 2 motors on a robot based on two inputs, for example) the ATTinys are ideal, and they can be programmed by an Arduino, ref ArduinoICSP. Code could even be written in the arduino IDE (with some tinkering).
That said many props for using Arduino in general, more people need to be making things involving micro controllers, if nothing else it creates a sense of appreciation for how advanced computers truly are.