AVR-Chat

My current project takes input from an RF receiver chip (the KH series
from Linx Technologies)and then reacts to the state of the 8 output
lines (which represent button/line activations on the Transmitter side).
If I can ever get this full prototype built (see the "Mega8 Programing
Problems" thread) I would like to produce quite a number of these
boards... In producing a large number of boards I would like to reduce
my cost per board as much as possible and one of my biggest cost right
now is the KH-Receiver (~$15 each)... The KH series incorperates a line
encoder/decoder chip into the transmiter/receiver chip.  The encoder
encodes 10 tristate(high/low/floating) "address" lines (which are set
with jumpers) and 8 dualstate (high/low) "data" lines, then the receiver
decodes the data transmision back into the respected lines...  Linx
makes a couple of other receivers which do not have the intgrated
decoders and as a result are ~$5-$10 cheaper.  As it is right now I am
only using about 200 bytes of the Mega8's code space, but I am having to
use the Mega8 to get enough I/O pins (and an internal ocilator, so I
don't have to mess with crystals and to keep the board as small as
possbile); it seems a waste of board space (all those data lines take up
a lot of pcb realestate) and waste of money to use the mega8 and the KH
receiver when a smaller avr should be able to do the decoding and
therefore only have a single data line and be able to use a cheaper and
smaller receiver.  The problem is that I have only ever done signal
processing once before and that was a lot of trial and error and an
oscilliscope was invaluable; now I do not have access to an oscilliscope
and I don't understand the TIMING of the encoded signals as it is
documented by Linx...plus I don't remember how I did the signal
processing before (that was two years ago).  Also for anyone who doesn't
remember I am the biologist who NEVER took an enginering class
(everything I know is self taught from the internet, and a lot of trial
and error), hence my not understanding those timing graph/diagrams that
they use in all the datasheets (I would understand numbers a lot better
than all those oscilating lines stacked above one another.)  If anyone
knows of any code (preferably ASM, although if I have to learn C I guess
I can) that I might be able to use as a basis for figuring out how to do
this kind of signal decoding, I would greatly appreciate it. 
Thanks,
Daniel