Hi Mr,
I notice you mention PIC, it may be a project on its own but if you have enough slots left on PIC, you could put onboard audio device, as well as some external ram, I once found a 4mb chip(i think it was flash ram) with spi communication in a 8pin package (was while ago, dont know whats available now).
Also even though all this is feasible, i have not successfully done it yet, the ram np to operate(different project), but my few attempts at audio fell short... was able to decode the wav file to analog, but i think i failed when trying to convert analog to pwm instead of investing in a DAC