Is this for using a PS2 keyboard on the 128D that is missing a KB? Or for using your 128 Keyboard on a PC that has PS2 input?
your best bet for making a PS2 kb work as a 128 keyboard is to find a matrix switch. There are some nice ones that have 8x12 matrix on them and make it easy to interface to the 128 keyboard layout. Then it's just a few control lines to whatever Arduino you use. PS2 libraries exist already so should be easy to hook into. At that point its just a matter of watching for key down and key up messages and turning the correct switch on and off. This allows for keyboard scanning and joystick scanning to all work with no danger from the micro controller if you code something wrong.