At first I read this and thought "Great, the worst of both solutions!". But thinking it through, this actually sounds pretty good. Everything runs on one box, so the architecture problems disappear. No more rsh. Performance will be improved over my proposed monolithic solution (these are mostly SMP boxes).
Best of all, I get to keep using the socket code I wrote that I'm so proud of. :)
Don, thanks for your comments too. Yes, I am somewhat nervous about how complex the system is becoming! I can't say too much about the application, but this isn't something that I would know how to solve with a web-browser.