[...] using a regular 595 (rated for 35mA per pin) to source all his rows. Worst case for him is 56 x 20mA with LEDS on in a row. It makes my head hurt on why that isn't exploding.
For me it would only be 16 x 20mA worst case because I will have a separate register per matrix, but two colors per pixel. Is this within the scope of sanity that this will work? Is the other guy getting away with it because scanning means it's only ever at 1/8 duty cycle? If that's the case, i'll have to break out the enable pins on the shift registers, so the LEDS aren't left 'on' during programming and power up.
If there's only 1 out of 8 on at any time, the off ones won't count of course.
If you, with the 1/8, go over the limits mentioned as normal working conditions, you are taking a chance.
If you go over (or even near) the max. ratings, all bets are off - you may get lucky and get better than the average component that the specs are for and you can monitor temperature rise in your own unit, but it gives bad Karma selling something that isn't designed to keep within specs (in your case, the Karma part may be quite tangible, as it's your "name" on the line) - ask yourself if you really wanna risk that and consider a redesign, whatever it takes to get your kit within limits.
There's enough poor design for sale already, better make it that bit more expensive and make sure you have a product that can handle itself (just my opinion of course, but there's a reason I don't buy Kitchen Sink Products, not because Kitchen Sink is necessarily a bad "company", but because there's so many poor hobby designs masked as real products and they're rarely that much cheaper, even though the established engineering businesses have years and years of experience and Quality Assurance that costs - and it's impossible to tell which will break and which will hold, if you've got nothing but a photo on a website to judge from.
That's why my advice is to make rock solid products from day one - it's hard to build a rep, but easy to shatter one by a single mistake.