Interesting theory of Nagao being Naofumi Hataya I found.
http://info.sonicretro.org/Naofumi_Hataya
EDIT: (03/06)
Listening to Death Egg from Sonic Drift 2 (M. Nagao, S. [Saori] Kobayashi [SE?]) and comparing it to Underground Zone (Gatao, Nao Chan, Dawasa [SE?]), I'd have to agree.
http://www.youtube.com/watch?v=Rm9f9WFibcE - Death Egg
http://www.youtube.com/watch?v=WCRUX07oRIc - Underground Zone
There's also the reuse of Title Screen from Sonic 2 [8-bit] [unedited] and familiar sections between Scrambled Egg Zone/Introduction and Boss (Game Gear), and Life Lost from Sonic 2 [8-bit] and Electric Egg Zone's Last Act, Final Boss, and Life Lost in Sonic Chaos (Mix [Kojiro Mikusa], Nagao N. Gee), respectively.
http://www.youtube.com/watch?v=fsqQg-LiEk0 - Scrambled Egg Zone
http://www.youtube.com/watch?v=IN36EIJjWNc - Electric Egg Zone Act 3
http://www.youtube.com/watch?v=OTkrus3xhSc - Boss
http://www.youtube.com/watch?v=A93lKPb62eU - Final Boss
http://www.youtube.com/watch?v=I3NP6WxfoR4 - Life Lost [Sonic 2]
http://www.youtube.com/watch?v=_4YpvifK728 - Life Lost [Sonic Chaos]
Then, of course, there's
those tracks from Sonic Drift (N. Gee) and Sonic 2 [8-bit] (Gatao). Sound familiar?
http://www.youtube.com/watch?v=-9FCRb64zMU - Invincibility (Sonic Drift)
http://www.youtube.com/watch?v=VDvJNpBEu0E - Green Hills Zone (Sonic the Hedgehog 2 [8-bit]) -->Definitely Gatao
Also,
those tracks from Sonic Drift 2 that suggest that Nagao was a BGM composer for Sonic 3. Again, sound familiar?
http://www.youtube.com/watch?v=[insert rest here] - Invincibility (Sonic Drift 2)
http://www.youtube.com/watch?v=ROFjFKPZwtU - Final Road (Sonic Drift 2)
Actually, this makes it look like Masayuki Nagao is either Masafumi Ogata [composer of Sonic - You Can Do Anything] or, better yet, a combination of both Masafumi and Naofumi into one entity. It's certainly not a new or uncommon idea.
ex. Ashirogi Muto from the manga Bakuman.