If you mounted an elongated stick to the actual analog thumbpad of the xbox controller, I'd imagine you'd quickly break it due to the extra leverage you'd generate. There is somebody working on a 49 way to pc joystick adapter I remember reading about recently, and he's almost to the point of a saleable product if I remember correctly, but I dont know the status. About an xbox controller, I dont know of anyone working on anything.
Sorry for the lack of info, but I just wanted to give you a bump, because I'd like to see something along these lines, as an XBOX would be a sweet arcade conversion, but like you said, so many games are just not playable without analog. Another problem is that a modern console controller is more flexible than the traditional layout of an arcade. You can easily work with 6 buttons, 2 analog triggers, and 2 analog controllers with an Xbox controller. Try putting that level of control into a panel, and I cant think of a way to make it doable.