So to make a long story short: I decided to make a quick hack up solution and write my own WP plugin. My only hurdle-like requirement is that it had to work for PHP4 as well because the client is on one of our older servers. I ended up finding a really good example by Ryan Stemkoski. He wrote a perfect function for me to tweak a little and expand upon. I am currently waiting to get approved on WordPress extend so I can host my plugin there. For now, I have created a page here where you can download the plugin.

Note: I haven’t tested this in a more recent version of WP yet but I will be soon. Let me know if you find any bugs!

I also figured I would post the source code in case someone needed a quick and dirty solution with some examples.

rss_lib.php

<?php

/*
* RSS Parsing Function
*
* Original Author: Ryan Stemkoski
* http://www.stemkoski.com/how-to-easily-parse-a-rss-feed-with-php-4-or-php-5/
*
* Slight modifications by Jesse R. Adams (DualTech Services, Inc.)
*/ 

function parseRSS($url) { 

	//PARSE RSS FEED
        $feedeed = implode('', file($url));
        $parser = xml_parser_create();
        xml_parse_into_struct($parser, $feedeed, $valueals, $index);
        xml_parser_free($parser);

	//CONSTRUCT ARRAY
        foreach($valueals as $keyey => $valueal){
            if($valueal['type'] != 'cdata') {
                $item[$keyey] = $valueal;
			}
        }

        $i = 0;

        foreach($item as $key => $value){

            if($value['type'] == 'open') {

                $i++;
                $itemame[$i] = $value['tag'];

            } elseif($value['type'] == 'close') {

                $feed = $values[$i];
                $item = $itemame[$i];
                $i--;

                if(count($values[$i])>1){
                    $values[$i][strtolower($item)][] = $feed;
                } else {
                    $values[$i][strtolower($item)] = $feed;
                }

            } else {
                $values[$i][strtolower($value['tag'])] = $value['value'];
            }
        }

	//RETURN ARRAY VALUES
	return $values[0];
} 

/*
* Convert Raw RSS Parse into concise list of items
*
* Optionally pass in limit (on number of items)
* and/or array list of words to grab items by.
*
*/

function extractRSSItems($xmlArray, $limit = null, $filteredWords = array()) {
	$array = array();
	$regex = null;

	if (count($filteredWords) > 0) {
		$regex = implode('|', $filteredWords);
	}

	foreach($xmlArray['rss']['channel']['item'] as $item) {
		if (!$regex || ($regex && preg_match("/$regex/i", $item['title']))) {
			$array[] = $item;
		}
 	}

	if($limit) {
		array_splice($array, ($limit - 1), (count($array) - $limit));
	}

	return $array;
}
?>

selective_rss.php

<?php
/*
Plugin Name: Selective RSS
Plugin URI: http://techno-geeks.org/selective-rss
Description: Simple Plugin that allows you to embed RSS feed items into Pages or Posts. Optionally allows you to choose how many items to display and allows you to limit items to ones that contain certain words in the titles.
Version: 0.1.0b
Author: Jesse R. Adams (DualTech Services, Inc.)
Author URI: http://www.dual-tech.com/about-dualtech-services/
*/

require_once('rss_lib.php');

function filter_feeds($content) {
	$limit = null;
	$filter = array();
	$url = null;

	$inputTag = preg_match('/\[srss (.+)\]/', $content, $matches);
	$rawArgs = explode(',', $matches[1]);

	foreach($rawArgs as $input) {
                preg_match_all('/^(url|filter|limit)=(.+)$/i', $input, $matches);
                $key = $matches[1][0];
                $value = $matches[2][0]

		if ($key == 'filter') {
			$filter = explode(';', $value);
		} else {
			$$key = $value;
		}
	}

	if ($url) {
		$xml = parseRSS($url);
		$items = extractRSSItems($xml, $limit, $filter);

		$htmlToAdd = '';
		foreach ($items as $item) {
			$htmlToAdd .= '<a href="' . $item['link'] . '" target="new">' . $item['title'] . '</a>' . "<br/>\n";
			$htmlToAdd .= $item['description'] . "<br/><br/>\n";
		}

		$content = preg_replace('/\[srss .+\]/', $htmlToAdd, $content);
	}
	return $content;
}

add_filter('the_content', 'filter_feeds');
?>

Update 06/19: Fixed the way arguments are parsed to be less limiting on possibilities.