Hi Steb,
That does look interesting. But implementing it is way above my knowledge level.

But I'll stay tuned--to learn.
If it proves too difficult, would a viable alternative be to make a remaster of an installed system that has several DE's installed as tasks? Meaning that, from the installed system you can log into any of the DE's installed by tasks, without rebooting or installing. I never heard of that configuration on a live-cd, but it seems it would work. I don't want to derail your thread, it was just a thought in case you could create what you want in a simpler way. I imagine it would run faster in that you would basically stay in the same environment, whereas to run a livecd instance within a live cd environment, it sounds unweildy to me. But I am not an expert.
Good luck & welcome to the forum.