Today in the basement of my apartment, made a short video of my working 8-string, 3-pedal digitally pitch-shifted pedal steel guitar. It starts with a fun, 1-minute late-night commercial-like intro, complete with pedal steel jargon. Then it goes on to show the pedals that are not connected, even indirectly, to any strings. Later, a quick change in the control code changes the effect of the third pedal.
The Proof of Concept instrument right now requires a good bit of external gear: 10-channel audio interface (simply to convert A/D and D/A) and my MacBook Pro running Puredata with an abstraction written by Katja Vetter. The pitch-shifting is controlled by sensors attached to the pedals sending data to a micro-controller via Open Sound Control (OSC) messages (rather than MIDI).
As you watch the video, look past all the wires and extra gear, and you'll see what the basic idea is.
This is the video Steve Fishell agreed to watch in advance of the our first meeting to show him, up close and personal, the Proof of Concept instrument. He appreciated the Prime Directive (don't change anything in terms of the sound of a pedal steel or the manner in which it is played); no need to change any technique acquired after years of practice. This is not a new instrument. It's a pedal steel guitar.