Could one create a package that invokes lilypond (an external command) and embeds the result?

What would it take to create a package that provides a lilypond function that invokes the lilypond command and automatically embeds the resulting output? Are there any packages that do something similar?

Impossible at the moment. A package cannot call an external command.

If you want to do that for your personal project, you have to make a custom build script that first runs lilypond, puts the output somewhere, and then renders the Typst document (which includes the lilypond output somewhere).

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