C64 emulator on Arduino?

Not yet, but almost... :)

Arduino 6502 emulator + BASIC interpreter looks like a very good start. 6502 emu on Arduino Uno, VIC-20 emulator on Due. Looks interesting. Still not the C64, but interesting.

And for those which wants emulated C64: Did you tried the CommodorePi? A C64 emulator for RasPi, with HDMI, Ethernet etc.