I believe that what you need is something like a pin screen (http://en.wikipedia.org/wiki/Pin_Art), with the pins hidden within and only visible when they're pushed out.
Pins could be manipulated with an x-y traversing arm that carries the character head.
The character head is an n*n array of pneumatic or hydraulic hammers, activated in different combinations by the keys of the keyboard. The hammers push the pins out in various combinations; the pins are a high contrast to the screen (white on black perhaps) that then appear as a character. Each key press advances the head one space.
Removing characters could be difficult. Perhaps the head can make a seal with the back of the character and simply suck the pins in again. Clearing the display would be as simple as tipping it back, or running a shallow-sloped wedge across the front to slide all the pins back into place.
What this offers: the display becomes its own memory buffer. Each character is "stored" in the display and can potentially be read back by a second head - or even the same head, if there's some way of shifting the hydraulic connection from the keyboard to a memory device. It'd be slow, one character at a time, but it could be done relatively simply by extending all the hammers on the write head and then pressing it against the character, and recording which hammers were pushed back and which remained in place. That would give you a record of the pins that had been stored in the display.
There'd need to be some way of preventing the pins moving at that point. Perhaps the pin screen could be made with a plate on the back that slides to one side when reading, narrowing the holes the pins pass through and wedging them in place.
Other possibilities: given you're working with a matrix of pins, you can go back and edit whatever you want by shifting the head back and forth with a set of control keys. With a little tinkering you could even have different font sizes, typefaces and even simple graphics.
No electricity or magnets required.
I hope that makes sense.