Take a look at a 8 bit Arduino synth kit from Zeppelin Design Labs, as well as some open source midi tools to help with MIDI development, built from SparkFun parts.
SparkFun Blog
https://www.sparkfun.com/news/2316
Macchiato Mini Synth
http://zeppelindesignlabs.com/product...
Mozzi Arduino Library
http://sensorium.github.io/Mozzi/
Midi Bender Sketch
https://github.com/marshalltaylorSFE/...
Wish lists:
Midi debug tool:
http://sfe.io/w135743
Midi bender:
http://sfe.io/w135745
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