I had a look at this, but it doesn't look like it is possible to do this as a plugin. I changed it around a little bit and got it working on 3.65. Then I noticed that there were some problems with it - namely that if you had 100 avatars in a category and 50 were already in use then it would select 150 records, but only display 100, repeating the same avatars over and over.
So I made some adjustments to the version I was making so that instead of being displayed with "taken" the used avatars are simply omitted from the list entirely (incorporating the suggestions made by others earlier in this thread).
I also removed the ability to turn this hack on or off on a per user basis - it simply applies to all users on the system now.
Even though this is a thread about a mod which only worked on 3.0, I've attached the version that works on 3.6 to this post. Since I'm not the author of this mod I can't really provide any support for it - sorry.
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