Oh, sorry, I don't know if this works on that firmware version. I bought it just a few weeks ago, updated the firmware then, and it updated to 2.2.7. I haven't updated since, and it works fine on mine.
I read somewhere that it was actually the new version of the software, and not the firmware that blocks them on the newest firmware. See if you can get a copy of XYZ Ware that isn't the latest one.
I don't. I built mine on the Arduino Uno. I recommended the Nano, so you could build a case for it and make it look nice. The pins on the Nano should be labelled the same though. Just connect it by using the same pin numbers.
Yes, this will work on the 2.2.7 firmware, which is the latest at this time.
Using 3rd Party Filament With Da Vinci Jr.View Instructable »
I used your schematic to do this mod on an Atari 2600 Jr. Since your guide was for a 4-switch model, I couldn't use the guide, but the schematic for the mod was perfect. I just so happened to have the necessary components in my component drawers. While I had the system open, I replaced the electrolytic capacitors on the board as well. This would be recommended for anyone doing mods or repairs to old consoles. They dry out and don't work as well. Here's a photo of it playing Dig Dug on my 50" TV.