I don't think you can easily replicate a "custom" Yun in your own circuit the way you can do with an Atmega328 after having cooked it in the Arduino Uno used as a programmer.
It's simply too complex in my opinion to manage the Atheros and WiFi chips.
So yes, you can create a standalone Yun appliance, but physically fitting the regular Yun board into it.
Perhaps in the future we might see a "Yun Mini" providing layout and size more suitable for embedding into custom circuits than for stacking shields in the usual way.
Andrea