Besides the Nano, another possibility might be the TinyDuino or TinyLily: http://tiny-circuits.com/products/tinyduino/
. They aren't shipping yet, but soon will be.
Teensy 2.0/2.0++ boards might also be a possibility: http://www.pjrc.com/store/teensy.html
In terms of battery for your light saber, I was looking for accessories for my new Samsung Galaxy S-II cell phone, and I noticed this battery on ebay: http://www.ebay.com/itm/330772818549?ssPageName=STRK:MESINDXX:IT&_trksid=p3984.m1436.l2649
. Unlike most of the batteries I've seen, it is only 22mm (0.87") in width, which might work well in a light saber handle. The power is 1850 maH. For a comparison, I ran my normal Arduino Uno with a 5000 maH battery doing blink, so it should give you about a day at a convention before you have to recharge.