Hello Squeeb did you make any progress on this? I just started working on this as well for one of my new games.
Dialogue delivery can be surprisingly tricky. I've saved text as a png in Photoshop, then called the png text as needed in Stencyl. This is super easy to code and worked very well for my old game, but is not flexible in terms of delivery.
I'm working out a new system for a new game, Hidden Scrolls Skyward, which will deliver text in a more traditional letter-by-letter method, and perhaps have an "Animalese" a la Animal Crossing or Zelda series.
I'm thinking about posting a YouTube video on the topic as well for discussion/ideas/knowledge sharing.
@Irock Your dialogue system and game look awesome! Is this a customization of the available Dialogue Extension?