This is an interesting hypothesis but it doesn't discuss one aspect of Hh evolution that is important to human development. In vertebrates Hh signaling is initiated in primary cilia. Ptc is found in the ciliary membrane but moves into the cell when Hh is added, while Smo moves into the cilium, in an elaborate interaction presumably with the IFT apparatus (see Kiprilov et al. JCB 2008, Ocbina and Anderson, 2008 for details). Could this be the primitive eukaryotic condition? Are the Hh receptors present in protists, possibly including choanoflagellates? If so, is Ptc a ciliary protein in these organisms?