I'd forgotten about MIX. Knuth's TAOCP was referenced during our data structure/algorithms university courses and we had an implementation to play around with written by a 3rd year student as their project.
Many people might agree with me on this. OOP and Functional programming both have their place. For example, you wouldn't use C# for writing a kernel or any other low-level environment.
Actually Microsoft was doing research some years ago on an OS written almost entirely in C# and running as managed code, called Singularity. It was abandoned, which I think it's a shame because it was an interesting project, but it proves that it's definitely possible.
Huh, I ran across Cosmos, something that supposedly uses C# and is "an operating system development kit which uses Visual Studio as its development environment."