[sdiy] mcu project with too few I/O lines :(

[Bert Schiettecatte]

hi all,

i'm doing a microcontroller project here with an optrex graphical 
display (128x64), rotary encoder, led matrix (16 leds), and key 
matrix (16 keys). of course there is also the midi and in system 
programming connectors. unfortunately my microcontroller (atmega8) 
does not have a lot of i/o lines available, and I'm left clueless 
how to interface all that stuff to it. The display has an 8bit 
data bus + a few i/o lines for reading, writing, etc. for the 
led matrix, i'd like brightness control for each led (PWM?). 

I thought about using a key encoder and maybe an LED driver but 
those ICs are pretty expensive (7$ for a key encoder, that's more 
than a microcontroller!). does anyone have some advice here and 
how to interface this stuff without buying tons of additional ICs 
which cost a lot of $$$?

thanks,
bert