You have a couple options, but the outlook is still not good.
You can hack a digital 8-way to the potentiometers of an PS2 analog stick, but then it won't really be analog (would similate full pressure in any of 8 directions). If the game requires precise movement (half way pressure for example) then this won't work.
You can try to hack a happ 49-way stick (found on ebay for cheap at times) using the circuit described in the Game Consoles section of this site. As far as I know nobody has attempted or gotten it to work yet. I tried to wire it up on a breadboard but used a ps2 3rd party stick that wasn't 5v (was 3.3v at the analog sticks)...need to try again one of these days...
You could buy a happ arcade analog stick and hack to the ps2 analog, but the happs analog stick is $180.
Thats pretty much all your options.