Sorry Mike I was getting the PWM output mixed up with the analogRead function LOL.
I really do think that the PWM can do it, because the ripple is only happening for about 4uS and the LDR's I have have a react time of around 19ms, it should be fine, my LDR's and LED's are arriving soon so I'm going to poke around with them for a while and see what I get.
I still think it's totally possible.