I have been wondering about building a LED based light for my new camera. Perhaps a ring of LEDS that go around the lens. They would be spaced out from the lens some what in an attempt to reduce back scatter. I think this may work well for macro shots and also help with focusing in low light. It would be more like a conventional video light than a flash/strobe.
Anyone got any thoughts on this?

Your problem would be matching the light source to what the cam's sensor is reading. I doubt very much if LED's are the same Kelvin rating as a cam strobe. So unless your cam can shoot in RAW and you have Photoshop so you can manipulate the colour your pic's will have shite colour.
A ring around the lens can only be used for Macro. You'll get some nasty shadows with this set up too-unless you can slightly angle the LEDs for different situations. Personally i believe you'll probably be better off making a hand held device you can use to help low light level focus-like a focus assist. Oh, you have made that already.

Camera flash is quite a complex thing nowadys with TTL(through the Lens) metering standard. How you gonna work that one out PH? Camera flash units also have the ability to provide JUST the right amount of flash for a given situation. You could get a light meter to go with it and work out how much light you'll need and then have the ability to dial it in as such. Sounds like a pretty complex and technical piece of equipment to make. Considering the relatively low cost of a 'factory' flash.

Also, the only way to effectively stop back scatter is to illuminate the area with great big filming lights from many directions. Like the pro photographers do. Or shoot in very clear water. Or shoot without flash.

LEDs are available in a wide range of deg K. As it seems are strobes. I can get them as low as 4500K or 5500K which most strobes seem to be so thats not so much of a problem. Although at these "low deg K" the LEDs are a little inefficient.

TTL metering is probably out of the question for me any way. The Canon housing that is in my budget does not allow for it, just optical pick up. But if the LED is on while in the prefocus more of the camera then the camera will adjust for the light anyway right??

The more I think about it the more I think I will be better off just buying a strobe or two. Problem is I just like building stuff!

The camera adjusts for the amount of light not the colour of the light. That's the biggest drawback with digital camera's. Back in the 'good old days' of film you had to put a filter over the lens if you were shooting indoors with flouro tube lighting. Now most real camera's have white balance controls that you set for say sunny, cloudy, flash, indoors etc. They normally have an Auto stting too. This is always crap don't use it.
Here's where RAW is of huge benefit. You fire away in whatever mode takes your fancy. Then adjust the white balance in PS. On my Nikon i have loads of different settings and they are all adjustable. Not one of them suits shooting on a sunny day in the bush. So i set my white Balance to K mode, dial in 5500 and then shoot away. Adjusting for white balance on my pc when i download from the card.

If i were you i'd buy a strobe that was manufactured for your cam. That way you can learn about composure, exposure etc without having the hassle of a strobe/flash over/underexposing your shots.

A little LED would make a great aiming light for use in those low light situations, tho sometimes you run the risk of the beam showing up in the picture. I've got a little jobbie that turns off as soon as the strobe fires. mind you most of the better strobes feature built in aiming lights.

http://www.protecsardinia.com/spip1.82ds/IMG/admezineissue3.pdf

This online mag has a bit of an article on using lights instead of strrobes