How about something like a Magna Doodle?
http://en.wikipedia.org/wiki/Magna_Doodle
I envision it to be similar to a mechanical typewriter but the keys would have magnetic letters and instead of striking an ink ribbon they would be placed upon the surface thus drawing up the ferrous material in the shape of a letter. A user adjustable wiper could be used to erase letters and a carriage return much like a standard typewriter would move the writing surface when a line was fully populated
Printing might be an issue but some kind of photography could be utilised to store the finished page of text before you had to wipe it all of and move on to the next.
Biting the hand that feeds IT
