behold, a little CAD model concept.
What do you think of something like this, Dave?
if you use SMD holders for the 2.54mm pin headers you can fit one on each side of the board.
then a card edge.
the entire board assembly there is only 14.5mm wide. This could be shrunk further by thinning the cooling blocks, however I don't think it'd be worth it as you'll need space between the card edge connectors anyway.
You could break out the Ethernet connections to the board easily enough too, as I've flipped them over.
12x 1.2GHz cores, with water blocks (or just passive)
93 x 14.5 x 60mm space.
That's 81cm3, 6.7cm3 per core
You could make this board double height, fitting 8 x 4 = 32 cores per PCB, the entire base board would fit in a space under 100x100 which means you could probibly get a 4 layer board made up for $50 for 10 pcs in china.
that brings the est price of each board to $85 (8*$9.99 for the 512MB ram version) , so for $850 + backplane cost you could make a 320 core, 1.2GHz cluster..
... I should probibly slow down now before I end up trying to do Dave's project myself.