Hello Erik,
The following web address sell the ATMega128L for $17.00. This sounds pretty cheap to me. If you can find an equivalent cheaper than this please post here.
Regards,
Charles Bannister
http://www.kanda.com/shopnav/s...=ATmega128

ATMega128 Order Code: ATMEGA128L Price: $17.00
ATMEL AVR - 64 Pin Part (TQFP64)
CMOS RISC, 8-BIT Microcontroller, In-system Programmable with Flash code storage, re-programmble up to 1000 times. Features 32 working registers, single clock cycle execution giving up to 1MIPs/MHz.
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Features

128K BYTES of In-System Programmable Flash
4K BYTES of In-System Programmable EEPROM
4K Bytes SRAM
Analog Comparator
Watchdog
SPI
2 8-bit Timers plus prescaler
16-bit Timer with PWM etc.
UART
8 channel, 10-bit ADC
Real Time Counter - RTC - with separate Oscillator
Low power and Idle modes, External and External interrupts, selectable on-chip Oscillator