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The Meaning of Life, the Universe, and Everything.
So, I actually got some progress done on this (looking through the system). And, the model renders, but with two problems: first is MAJOR FPS drop (150 to 3). I am guessing it is because I add the layer in my event constantly, but I am not sure. Secondly, the model scale is incorrect, as shown here (it's rendered too small, just below the body which is where it needs to be):
The FPS issue is caused by a memory leak. Every time the entity renders (every frame) you add a new layer to the entity, and those layers are not being removed or garbage collected. This will cause the time required to complete a frame to increase (because you now have to do 1000+ times more rendering) and your memory to slowly fill up. The current solution that I have found is to add the layer to the skinMap during the init phase. You will need to add it to both the steve and alex model.
As for the backpack being rendered at the wrong size, and at the wrong position, you can use GLStateManager to scale (increase / decrease size) and translate (move on an XYZ axis) to the correct size and location.
Minecraft.getMinecraft().getRenderManager().getSkinMap().get("default")) will give you an instance of PlayerRenderer which is a RendererLivingEntity. You can simply store it as a variable before adding the layer.