Its been a while and we have been hard at work at the Wiikey U hardware. WiiU encrypts the data sent from the drive with AES-CBC-128. We have now fully integrated an AES core into the FPGA and it is operating at the same speed as the drive. We've had a setback with another component though, and we are now testing alternatives. Hopefully we will have another update in a few more weeks.
Have not seen anyone post this, so I thought I would.