I have some questions regarding the I2C protocol. Is it possible to use multiplexing/demultiplexing to combine the sda and scl lines into a single one? Is it possible to use multiplexing/demultiplexing to create an extended I2C protocol where two masters can speak on the same bus at the same time to two different slaves?
You can convert I2C transactions to any other protocol that runs on 1 wire, such as UART, and convert them back to I2C transations. So if you only ask if it is possible in any way, yes, but it depends what you mean by multiplexing, so it might be a no.
I2C won't allow two masters to communicate on a single bus simultaneously, as only one transaction may be going on the I2C bus at any given time, so if you only ask if it is possible, no it isn't.