The mighty Protodome! Welcome to the board
Atmega is a very nice chip, and it's certainly capable of outputting polyphony on a single pin. Provided you're willing to program it in assembly, that is. A pin pulse routine might even be feasible in C, but I think what you'd rather want is a tight, timing-stable loop that alternates between the various software outputs (aka Pulse Interleaving). I suppose you have read the tutorial thread? That contains pretty much most of the known tricks, and should be applicable to Atmega as well.
If not, please specify a bit more what you want to do, I'm sure we can work something out