Assuming I understand you correctly, I don't think this is at all practical.
Are you proposing to intercept the USB line (D+/D-)? Are you proposing to interpret the data on the line and determine when to turn the bus around?
Does Cyclone II (or Cyclone V, depending on DE-1 board) support the USB I/O standard or an alternative, suitable I/O standard? Which I/O standard are you proposing to use?
I think, without dedicated USB phys attached to the FPGA, you're not likely to get anywhere.
Take a look at
ftdi (
http://www.ftdichip.com/). They do plenty of USB phys which you could attach to an FPGA. You may be able to do what you're trying to do by connecting two to your FPGA 'back-to-back', so to speak.
Cheers,
Alex