Idea for accurate DPS modelling

Fair warning: this is a topic which few outside the WoW community would appreciate. It's applying geek math to a geek hobby -- it's geek squared.

Anyways, the concept, which I'm still formulating is as follows:

1. Create an orthogonal basis set for the class in question, defined by the spells used by that class most often in a rotation. Use this to form a square transition matrix, under the Markov approximation that the transitions between basis elements is only dependent on the previous state (the spell cast before last).
2. Determine a set of relevant events which might affect this transition matrix. For our WoW example, I think monitoring debuffs/buffs on the character, character created debuffs on the boss, and boss abilities would be a good starting point. You'd want to filter these to a minimum. We'll call these "perturbative event vectors".
3. Compute the transition matrix using standard HMM modelling techniques, over a duration whose end points are defined by the events are given in #2. This might require the creation of composite event vectors which enumerate simultaneous input possibilities. The concept of a time boundary I think needs to be a little squishy in that regard (so you account for reaction time. Simultaneous = within some reaction time interval).
4. This should result in a piece-wise Markov process.
5. Take these piece-wise chunks of the transition matrix, with their associated perturbative event vector, and create some sort of comparative method to compare them with similar events (and the events that created them). Taken over a large number of similar events, you could then cluster the transition matrices (with their associated perturbative event vectors), and come with a set of average transition responses to events.
6. You can then use these data, and create entirely new novel event sequences. Modelling, for example a certain number of resists, boss ability use frequency, etc, to generate DPS figures for a number of different behavioral profiles. Ellucidating these profiles would help identify proper response behavior, and thus one could use this to improve DPS.