I think I've found the perfect microcontroller for this project. The PICAXE-08. It's got 4 general-pupose inputs and serial in/out. It doesn't even require an external crystal. I should be able to power it using a 5v regulator off the S149's printer batteries (I plan to embed it inside the body of the timer and put my own 3-pin serial interface on it).
Reading the 4-bit bus should be pretty easy. The encoding they've chosen means that no 2 sequential characters can be the same. So, I simply sample the data and compare it against the previous sample. If it's the same, do nothing. If it's different, then I know I've got the next nibble. From there, it's a simple matter of translating the proprietary character code to ASCII and then sending it out the serial port.
What do you think?