Afetr much thought, I decided that only characters I'd really expect to see are:
1-Ridley
2-Wolf
3-Samurai Goroh
4-Balloon Fighter
5-Mach Rider
Why, you ask? I'll tell you why.
1. 2. 3. These guys appeared in the intro to Melee. I had a friend who thought Ridley was playable.
4.5. Their theme songs were in Melee. Balloon Fighter was also a candidate for the character to represent the Famicom, second to the Ice Climbers, who won.
Added to the original 26 (I was wrong before, Shiek counts as a separate character) along with the 5 confirmed characters, we get 31. Add to that the characters I listed above and the total comes to 36. I expect to see 38-40 characters in the final game depending on whether or not more 3rd party characters are added.
For the other four characters, I'd like to see Toad, Diddy and Dixie as a team, and if 3rd parties are considered Sonic and Bonk. If the thing about removing characters is true (as sad as I am about it) I beleive the most likely to get removed are Doc(Too many Mario characters) Pichu(We need a Ruby/Sapphire representative)and Roy(he was only added to advertise for Fire Emblem 6).
I think Falco and Ganondorf should be kept because they were planned to be in the game from the start, but were made into clones to save time and Young Link can be changed to look like his Wind Waker self. That leaves 35(or 37 if you count the 3rd party ones) characters. The last 3 could be Lip, King DeDeDe and Wynaut/Plusle and Minun/Muchlax.It should also be noted that originally Jigglypuff was to be taken out, but remained due to an outcry of Japanese Pokefans and Marth was supposed to be Sigurd, but Sakurai was told to add Roy(for the reason previously stated in this post) and Marth to represent the beggining of the FE series.It should also be noted that Sakurai considered changing Ness to a character from Mother 3, but the game had been canceled at the time.
My Final List
Mario
Mario
Luigi
Peach
Bowser
Yoshi
Toad
Wario
DK
Donkey Kong
Diddy+Dixie
Zelda
Link
Zelda
Sheik(she counts)
Ganondorf
Young Link(Cel-da)
Metroid
Samus
ZS Samus
Ridley
Kirby
Kirby
Metaknight
King DeDeDe
Star Fox
Fox
Falco
Wolf
Pokemon
Pikachu
Jigglypuff
Mewtwo
Wynaut(or Plusle+Minun or Muchlax)
F-zero
Captain Falcon
Samurai Goroh
Other
Ness (maybe changed to Lucas)
Marth (likely changed to Sigurd)
Ice Cilmber
Mr. Game+Watch
Pit
Balloon Fighter
Mach Rider
Lip
Solid Snake
Sonic the Hedgehog
Bonk
Mario-7
DK-2
Zelda-5
Metroid-3
Kirby-3
Star Fox-3
Pokemon-4
F-zero-2
Other-9(or 11 if you count Sonic and Bonk)
Total- 38(or 40 if you count Sonic and Bonk)