Well, after many days of even more attempts, I finally have success (more or less anyways). I'll spare everyone the details of my all my failed attempts and focus on the technique that was more positive. I used a combination of a trial of Vmware fusion 4.0 and Snow Leopard Server "evaluation" to get a virtual mac inside of Lion.
From there, I connected a 250gb USB hard drive and a USB external DVD+RW drive (with the retail 10.6.3 Snow Leopard DVD inside it) to my mini. Inside the virtual machine (SL server), I used my knowledge of a "hackintosh" process to install Snow Leopard from the retail DVD without the need to reboot during the setup. First, I downloaded a program to "show all files" inside of Snow Leopard Server. There are command line functions that do this as well. Now that all the files were showing, I navigated to the /System/Installation/Packages folder on the retail DVD. I then found the Osinstall.mpkg file and launched it. The install from the retail DVD took about an hour. I was installing to the USB hard drive.
Once the install was complete, I downloaded an ran the 10.6.8 combo update (the latest one). My destination for the update was the newly installed USB hard drive. Now that was complete, I shut down the virtual machine, and told Lion to make my USB hard drive the bootable device. Some background I probably should have mentioned earlier is that I was using HDMI for my video all along, this hasn't changed yet. Continuing on,,,,
Once the system rebooted, it was loading off of the USB hard drive (slowly...). I noticed some graphical weirdness when the "welcome to Macintosh" introduction was coming on. My screen had at tint of pink to it. Something definitely was a bit wonky with the video (this i5 mini has the Intel HD 3000 video). I went through the setup and was on my desktop (with a pink screen). It wasn't completely pink, it looked like I was looking through pink glasses (or rose colored glasses, if you will,...but that's another story 😀).
Anyways, The sound worked great, my wifi and bluetooth seemed to be detected fine. Network speed was good. There was some cursor glitches. I also noticed my display somehow thought I was running dual displays when in fact I only had one HDMI cable plugged in (this mini doesn't even have two HDMI ports). So, what to do with a phantom dual display and pink screen? This "split personality" of sorts with the display?
I figured I'd tell the mac to 'pull itself together'. I set the appropriate refresh rate, and the key for me was the "mirror displays" option. Basically, having "both" displays act as one (when in reality, there was only one). When I did that, it got rid of the pink screen and it looked perfectly normal. I verified through opening a picture and running Xbench that my Quartz Extreme and Core Image were indeed functional.
I was still using HDMI at this stage. I figured I'd test my "thunderbolt" port with a mini-display to VGA adapter. Plugged it in, and the display now showed up as RGB (which is my vga setting on my monitor, 37" Visio HDTV). I unplugged the HDMI cable and the screen blinked but came back on (still on VGA).
Please excuse my rambling with the detailed description of the events in the last several days. My techniques were probably unorthodox, but I've glad I've been successful so far. It's a bit strange when I reboot the mini, my HDTV won't display any picture until I unplug and replug my mini-dvi to VGA adapter. I guess the mac is just "missing" its presence when I reboot the machine.
All I have left to do is use a program like SuperDuper and image the USB hard drive to the actual hard drive on the mini. This will be done through putting the mini into target disc mode (my G4 should be able to run SuperDuper well enough).