um, I don't see why the project couldn't be converted to uses lasers, (probably need more than a few laser diodes though...), however the image on the wall would be 'stretched' in the direction of the rotation somewhat (because of the higher distance that it is being projected over). Also, unless you were projecting it onto a wall with the same curve as the arc of the projector, the image would be distorted even more (it would get stretched more at the edges than in the middle).
I don't see why it couldn't be done, but I don't think it would as simple as replacing the LEDs.
Tim.