Thanks for the response and the link to the 4 channel optoisolator. I didnt think of feeding the output of the isolator to the multiplexer, in order to bring down the needed pins from the atmel...that is great.
I did come up with another option that I am tempted to do. I could actually cut the wire carrying the 6v AC into and out of the bank of 10 switches. I would then take a long wire and connect from the light in front and in back of the bank, basically bypassing the 10 bank but keeping the rest of the pinball alive and bright. I dont need the 10 light bulbs to light because I am replacing them with the atmel controlled LEDs.
Then I would supply 5v DC from the atmel directly to the switches. I could even use a wall wart to supply DC power to everything.
I think I follow that. You would be isolating the switch circuits (10 contact wires and one common wire) and running them as an externally 5vdc powered circuit that could wire to the de-mux inputs (or even directly to the micros digital input if you have 10 to spare). That would eliminate needing opto-isolation or rectifying & filtering of the AC. Sounds very workable, but read P's post above and try to determine if each switch circuit is an independent circuit with one shared voltage source and not some kind of matrix wired set-up.
My only problem is that I want the change to be easily reversible, and cutting wires is kind of ummm cheating.
You might consider after cutting wires to install in-line connectors such that converting back would just be a matter of reconnecting to the original configuration. Single wire crimp type connectors are simple and pretty cheap. Here is an example of a female type spade connector. 1/4" QUICK CONNECT FEMALE, RED | AllElectronics.com
In the end I need to use a transistor like a tip102 to get a solenoid to fire (1000s point reel). This is being powered by 24V AC. Can run this directly thru the transistor and trigger it with a 5v digital out of the atmel? (Sorry again for my ignorance).
Well a simple easy method would be to use a solid state relay. It's input can be directly wired to a micro's 5vdc digital out pin. An advantage here is it uses a building optical isolator so you don't have to wire the grounds from the pinball to the micro. Here is one example that can switch 1 amp of AC current: 1A SOLID-STATE RELAY, 3-8VDC CONTROL | AllElectronics.com
Thanks again,
Ben