Yes, it's a pipe dream.

No fabric exists, as of yet, that is breathable enough to be truly waterproof and provide enough ventilation for the kind of sweat one produces on a bicycle while keeping a good pace. I have an Endura waterproof cycling jacket that does decently, but I can only wear it, even with just a lightweight athletic T on underneath, when the temperature gets decently below 40 degrees F. The eVent stuff is supposed to be more breathable and that might be true, but I doubt they're breathable enough.

Go with wool and synthetics that are water resistant, breath well, dry quickly, and stay comfy when they're wet. I commute and ride everywhere in Seattle; as an example this morning it was drizzling quite hard but now it's sunny and gorgeous. Between my lightweight knickers, Under Armour T (one of the like cotton ones), Ibex wool layer thing, and my fenders, I'm set.

I tried the waterproof, breathable, rainsuit thing with good Helly Hanson stuff. Didn't work.