mathdown
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Hide all formatting chars except for currently edited?
http://mangomarkdown.com/ does this. I'm not quite convinced it's a good idea — it becomes too close to a WYSIWYG editor (with an obscure way to format things) to my taste.
But here is a very simple idea for implementation that might just work: enable styleActiveLine option, use markdown mode's option to style formatting chars, hide them with CSS except for current line!
+1
But if you are not convinced, then maybe as an edit mode one can switch.
BTW: See also http://hackpad.com, which uses some Markdown (list, titles); but there it obscures source too much.