PsNee modchip is pretty cool. I just did two PSOne systems with ATtiny85s. Just remember to burn the fuses ("Burn Bootloader" in arduino IDE) for the 8 MHz internal osc. I'm using bare ATTiny85 SOIC packages, solder it down once to my programming/test jig, flash once with an LED blink program to make sure everything's good, then flash with PSNee. Desolder from test jig, solder onto bare SOIC breakout, run wires.
Getting a functional arduino programming setup is a bit of a hassle (I just gave up fighting permissions issues and just run "sudo arduino"), but it's still way better than the old days of flashing questionable .hex's through ancient Windows-only software and hw tooling.
K3B will burn discs that are .cue, .bin, but only with a single .bin track. I switched to ImgBurn under wine since it can handle .cue + multi .bin isos as well.