Yes, finite state machine. And no if you look at the midi specification program change only takes one value, I do not know why it needs to be in the second spot...

your delays are short but you might want to try a FSM...


a friend of mine is selling a complete kaoss pad guitar check it out at my website
http://www.wix.com/twocherriesins/home

your midi out for the rotary encoder won't work. it should be
   midi(0XC0, 0, value);

you also might need +5v on the center pin of the rotary encoder.
other than that it looks ok...

http://twocherriesinstruments.ecrater.com/

thanks for the plug Supper Matt! if your not up to the challenge of building a FSM then get my kit I have new Videos up on my new channel at youtube just look for TwoCherriesIns... on the encoder I use the interrupts so check them out in the learning section.
   http://twocherriesinstruments.ecrater.com/
  

don't listen to mowcius its a resistive touch screen with 4 wires and it uses 4 analog inputs with resistors to ground