hey, not sure if you're still pursuing this, but I wonder if you used the different blend modes for layers and objects you could create a mask for the User Media layer.
If you look in the tutorials that come with C2 there is one for a flashlight sort of effect. You could use this same principle to achieve an oval-shaped and even a feathered mask.
as far as I know however, usermedia is primarily only supported in Chrome Desktop. just fyi