It may seem weird, but I gotta also go with recommending a PS360. For someone wanting just PS3 and 360 in a custom stick case, it’s the best option. Now if you wanted PS3+PSX instead or PSX+DC, maybe I’d try to talk you out of it, but PS3+360+custom case = PS360. Doing a ChimpSMD+360 fightpad is an option, but the only benefit to doing it is autodetect and a couple of cool LEDs visible from the bottom. The downside to going that route is tons more works doing all of the wiring.
Now, for getting around the ‘two buttons’ problem, I’d suggest getting an Imp (either direct from me or waiting a couple of days for LizardLick to restock). The way I’d wire it if I were you would be to connect the Turbo and Select buttons with a short piece of wire on the PS360 screw terminals. So when you hold Select on plug in, it will go switch to the other console mode.
Next, wire the imp up only using the start, select, guide, vcc, and gnd buttons. Do not hook up the imp to the USB wires at all, you dont want to use imp switching, just the Start+select=Guide functionality. Remember to short the unlabelled solder jumper on the bottom of the board (Imp 1.1)
Hold select on plug in -> Change system
Select button (press and release) -> Select/Back
Select button (hold and press other buttons) -> Turbo (and select)
Start -> Start
Start + Select -> Home/Guide
Fight the peer pressure, and do NOT drill into that case! With luck, you might be able to fit the PS360 pcb and imp into that project box in the stick. If not, you may want to try getting the pcb from a Joytron revolution stick; you’d have to order that from etokki.com. That board doesn’t have the friendly USB jack and screw terminals, but it a small board that can definitely be made to fit in the box and is functionally identical to the PS360 board.