Mapping a digital signal to an external port that is then encrypted by a dongle? I'm quite sure you can't do that and get a HDCP license. At the very core, it is completely against what HDCP is about.
I'm not sure it's the HDCP license that's the issue, but getting an AACS license. If you're asking whether you can get a license to make a device which takes unencrypted content and produces HDMI output, the answer is yes, and there are several devices on the market that do this today. It's the reverse that you won't get a license for (stripping HDCP, which is what some devices do, usually via an easter-egg)
Unless you are talking HDMI w/o HDCP, which then wouldn't allow upconversion of DVD's, Providers would have a problem with providing HiDef content on Live, and HD/DVD would not be allowed at all.
Err, Bravo D1 DVD players did upconversion over DVI with no HDCP. You can plug these into an DVI->HDMI adapter and they work just fine on HDMI displays (atleast on mine)
But if you're concerned, all you need to do is equip the digital A/V port with authentication. You could trivially do this by piggy backing a 16-byte challenge over the DDC or DDC-like channel, and equiping the dongle with logic to hand back an MD5 or SHA1 response. The cheapest way to do this would be to simply put a <$1 smartcard chip in there, many of which contain hardware accelerated MD5 blocks, or simply evaluate MD5 in software on the chip (easily done, public sources are available)
Then the display would refuse to output an unencrypted single to any dongle unless the dongle was authenticated. Whilest one could still interpose a proxy between the dongle and the port, this would serve to prevent third party dongles, but still permit ripping if you really wanted. But then again, one can always rip HDMI if one is really serious about it. The issue is the threat model you want to protect again. Really dedicated people will simply mod the 360 mainboard to rip the signals. Dedicated hackers already ripped HD-DVD by simple memory probes to find the session key, so software is an issue too.
Anyway, the issue isn't that it isn't possible to do with some upfront design, it's that MS didn't do it. I have no doubt they could have created a design that would permit future HDMI expansion and maintain a reasonable level of security at low cost. The reality is, they weren't interested in these users or the future of the HD Era, but in launching ASAP, which is why their first batch of consoles had IMHO an unacceptably high rate of defects.