This paper presents an innovative digital musical instrument, the Illusio, based on an augmented multi-touch interface that combines a traditional multi-touch surface and a device similar to a guitar pedal. Illusio allows users to perform by drawing and by associating the sketches with live loops. These loops are manipulated based on a concept called hierarchical live looping, which extends traditional live looping through the use of a musical tree, in which any music operation applied to a given node affects all its children nodes. Finally, we evaluate the instrument considering the performer and the audience, which are two of the most important stakeholders involved in the use, conception, and perception of a musical device. The results achieved are encouraging and led to useful insights about how to improve instrument features, performance and usability.