I have to agree, while you can get there, it will take work. Not even scatter mode will work in 16m, it's not enough ram to start udev. It will run in 20mb, but you'd still need swap to do anything useful. If you used static devices, scatter mode and removed udev, maybe MC would boot in 16mb.
Weigh in your requirements; if you don't need something recent on the base such as Microcore, you'd be much better off with a floppy distro or one designed for 4mb (basic linux?). Those ultra-low-ram ones will let your app have more free ram.