It sounds like "actions" is what you're looking for...
On mouse over, go to a specific point in the timeline (or tell a separate timeline to play). On mouse out, go back to the beginning.
I used a similar technique with B.R.O.O.M.
When the gear icon is clicked in classic mode, the settings window appears. Click the gear icon again and it disappears. I used a button because that's proper for something like this. But in general, I try to avoid making actions mouseover specific. Mobile phone are much more common and they normally use touch events instead of a mouse over / cursor.