This would certainly be possible. I encourage you to download the code:
http://hdviewsl.codeplex.com/, update it to SL5, and submit the changes back to codeplex.
Note that the Silverlight panorama viewing control on http://photosynth.net already handles re-projection of immersive imagery. But, in that case we used a cube map instead of a spherical
(also known as equirectangular) map. Using cubes makes the reprojection possible on older versions of Silverlight. Another option to consider is uploading your content to Photosynth and using the Photosynth embed code on your web site.