I asked the master of PSF himself, Neill Corlett, back in November. Here's what he said:
I doubt it, since there's not enough power with a 66MHz ARM9 even if the
player was very clever. PSP would be a different story.
-- Neill Corlett
Oh, and as a follow up he said:
> Thanks for your fast reply! At least I know it's rather impossible, and
> if it were possible I guess the playback would be limited (like no
> reverb or something), which would make it lose much of my interest.
I'd say with no reverb and no interpolation it might be possible.
-- Neill Corlett