Good points. I realize the h.264 compression would be a separate engine. As far as an ARM codec, for comparison you can do real-time decoding of MPEG on very low performance systems
http://www.rockbox.org/wiki/PluginMpegplayer#PerformanceAnd there's codecs which are very fast encoding on PC. I'm sure there's a tradeoff somewhere between compression and bandwidth which maximizes resolution, but certainly you're not going to get full resolution.
Do you know how the HDR sensor mode in magic lantern works? Does it still send the data directly to the compressor?
I wonder if you could send half an image over USB and write the other half to SD card? Overclock the CPU?
I tried two cameras, and you're right, they only show over HDMI in playback mode. The quality of the images seems full, but the status overlay is lo-res. There might be some hack to enable live view.