I'm about to embark on this project. Hopefully going to port it to the MCF52277 (as it has the USB block).
I think the external flash accessed through the FlexBus might be quite a challenge but I can't see why it won't work as long as I alter the memory locations accordingly and can get the bootloader to use the spansion flash algorithm somehow.
Any advice on how to go about this would be greatly appreciated as the only other thread i can find is:
...which doesn't sound very encouraging!