When we approach the New Testament with "mercy not sacrifice" as our rightful frame of reference, the notion of penal substitution is seen for what it is–something like an Aztec or Greek ("pagan") notion.
Atonement in this sense is like the Pharmakos. In Ancient Greek religion, Pharmakos (where we get pharmacology) was a kind of scapegoat. Pharmakoi were selected usually because of some physical deformity. They were kept, feed well, until the first day of the Thargelia, a festival of Apollo. Then one was chosen by lot, was led out of the city, and sacrificed as expiation. This would purify the people and the city.
On the other hand true "Atonement" is a fulfillment of the biblical priestly liturgy. This liturgy always pointed to something radically beyond itself, namely, a "sacrifice" born of love that subverts and unmasks all sacrificing.
This frame of reference, "mercy not sacrifice", is crucial for nothing short of the "rebirth" of Christianity.
I agree that much of what passes for theology in evangelical circles needs to be rethought so the gospel can be re-experienced.
Much of the old old story never rung true for me. (Believe to avoid hell just didn’t mae sense.)
I am interested in emerging church theology. I really enjoyed and agreed with much in A Generous Orthodoxy.
My individual sense is that sacrifice will remain central but perhaps it will need to be reinterpreted along lines you are exploring.
I also think that the atoning sacrifice that makes reconciliation of God to manward needs to be seen and preached as a reconciliation of man to Godward.
It seems as if suffering is integral to creating the Sons of God and God was saying that I see and know the price humanity is asked to pay for life in this world. If God could have made us Sons of God from the beginning I think he would have skipped history and its untold atrocities and disasters and tragedies. Obviously it could not be done any other way than to allow sin (thru choice) to bring in sufferring and now the opportunity for choice to be made to become the Sons of God (Bride of Christ).
the cross is also God saying I see how much this is costing you, and I will share in it inimately and in solidarity with you. (See me bleed, see me die.)