I would go with Alternate Magical Paradigm as well, though I usually grant my players that without paying a fate point, but only allow it if it fits the character concept. In this case, replacing discipline with performance seems reasonable enough. Maybe Conviction with (Stage) Presence as well.
The fiddle should probably be an item of power, yes. I would probably go with a music themed channeling, focus slots for defensive stuff, so you can buff your allies.
Unless the character has his own magic that the fiddle just helped bring to the front. In that case, you could drop the Item of Power and take the power yourself and then treat the fiddle as a focus item.
Marked by Power seems like a good fit as well, though not directly related to magic.
I really only make "Alternate Magical Paradigm" cost extra if someone tries to use it with things like fists, athletics, and endurance because that is definitely more powerful. Having it with performance skills isn't any more powerful than the basic magic set, and may be noticeably weaker if mental enemies are common (like WCVs).
So basically call it Channeling but use Performance in place of discipline, Presence in place of conviction, and keep Lore where it is. Easy enough. I'd make the fiddle a focus item, personally, because I'd prefer to have the ability to use magic by singing, tapping out a beat, etc. But if you're saying the power comes from the fiddle than make it an IoP. To optimize refresh, add a point of Refinement on, or make it Evocation instead of Thaumaturgy.
Thematically, Air or Spirit would work well, or a different element like Music (work with your GM as to what it's limits should be). If you go Evocation, Air, Spirit, and maybe Fire (since it's a bit infernal).
