There are a number of projects on the net where people use small micros to make a db meter.
There are several ways to do the ‘analog’ part of the project. One is to use op-amps and diodes to change the audio signal to rectified, filtered DC. Look for db meter information and then replace the meter with a micro.
The other way is to send the audio directly into the ADC and let the software do the rectifying and filtering. That worked for me for average reading and peak readings but I had to move up to the PICF18xxxx to get speed for RMS readings.
Driving LEDs is simple and fast. When I used a LCD the time it takes to talk to the LCD is too long to do the RMS conversion and up data the LCD. If you use the analog rectifiers and filters then the computer is not very busy and can talk to the LCD just fine.