Hmm, that's a bit strange having the number row on the numpad - some of the numpad functions wouldn't be available, like ALT+numbers to directly enter a character code. And it gives the firmware headaches to have multiple keys producing the same keycodes, when deciding what to do when someone presses both '1's, for example.
Here's my idea - do more to do less!
I'll call the key switching between the two layouts 'Mode'.
When Mode is off, the numpad area would function exactly as a regular 104-key numpad (albeit with one extra key lower-left doing something, since Insert is split into two single unit size keys).
NumLock would be there and operate as normal.
When mode is on, the numpad area becomes the cursors, pgup/dn etc and media controls.
(NumLock would not be in that layer, just as it isn't there on a tenkeyless board).
What's nice is that it gives you all the functions of a full-size 'board with media keys, in a compact format.
To achieve that, the firmware changes would be minimal (I think the only tricky choice is what to do if someone is holding down a key or keys on the numpad when Mode is pressed). In fact, using that latching switch and one or two extra ICs, it's possible that a completely standard controller and firmware could be used!
