I was made aware of work done on an "inline editor" -- see http://www.mediawiki.org/wiki/Extension:InlineEditor and code at http://svn.wikimedia.org/svnroot/mediawiki/trunk/extensions/InlineEditor/ .
This work was done by a team coordinated by GRNET (Greek Research Network), which developed a WYSIWYG editor that produces MediaWiki syntax.
I presume that the Visual Editor team (Wikimedia Foundation and Wikia) already know about this work as a predecessor to their own, but just wanted to share it in case it's useful to anyone else while they wait for the Visual Editor.