It's definately doable, and it's definately hard.
There are some examples of systems setup this way that have already been done - the best example would be something like the Laborghini Gaillardo (sp?), which is mid-engined, AWD.
The problem really is that there are no commonly available parts to do it. The systems usually run the driveshaft forward off-center. The main issue I see with a setup like this is you can't get the bits to do this from anything common. Pintos and escorts don't use mid-engine 4wd drivetrains
There is another solution that could be slick though and that is to use something like a porsche 6 with a massive alternator on it, and run an electric drivetrain at the front - that would be pretty sick.
The shame of it to me though is that the 914 front suspension is so gorgeous and elegant that it would be a shame to have to replace it to get a steerable drivetrain. Also - there would be a lot of weight gain from batteries etc since one would really have a gas/electric hybrid at this point.
Just my 2c. It's also possible to do it with 2 gas engines - there was a Lotus 7 with 2 1300cc Hayabusa engines in it (one front, one rear) on 5th gear once... that setup would also be possible, and wicked quick.