Possible!

Have a look at the blog plugin to start your development. Its well commented. Or you can have a look at http://docs.elgg.org as a guide.

Amberm, as it was mentioned, it's certainly possible to implement. You can choose two approaches:

1. Rebuild thewire plugin and add features you need - quicker solution

2. Create new plugin - cleaner and more flexible, but more complex and work consuming solution

I appreciate the feedback! Looks like I'm in over my head on this one and will not be able to use Elgg on this project.  I look forward to experimenting with it on future projects!