I don’t think creating an external unit instead of implementing it on the OSSC is a good idea.
With all the components needed for an external unit (video decoder, CPLD/FPGA, DAC, SCART or composite/S-video connectors, RGB out, PSU, etc) you are probably looking at least 80 euro for an external unit. Implementing it on the OSSC would probably cost less than 10 euro in parts.
Such an external device would have more utility to me, and potentially to those with older OSSCs. It would mean an affordable, available device that would let us use S-Video devices on modern TVs, which haven’t been available with S-Video inputs for, what, nearly a decade now?
That said, I would welcome a version of the OSSC with S-Video and Composite support built in.
It would also mean the conversion would go from analog->digital->analog->digital.
Are there no chips that do straight analog->analog transcoding? 🙁