Trying to decide the settings for the tournament now doesn't make sense. Campaign for the tournament now, and if CC decided to adopt it then we can debate what settings will work best. It's good that you have some initial settings and limits so everyone can see how it MIGHT function, but the settings aren't the important part. The concept is what matters.
To expand on the concept, I think there should be multiple CC tournaments, similar to how the World Series of Poker functions. All the current generic tournaments are your home games, your world poker tour, your buy-in games etc. The world series however would be CC sanctioned, organized by mods/tournament directors, and have different games for different settings. ie, an escalating tournament, a flat rate, a no cards, a speed, a fog, a 2 player, a team, a cross map, a terminator, an assassin. And then the Main Event would be hosted on the most common or most "standard" settings, which would probably be 6 player, Classic, escalating, seq, chained.
It's a lot of work for some people, but the TD's already host plenty of tournaments anyway. Having official tournaments would increase traffic to that area of the site, and it would reward players for being the best (or very good) at a particular setting. It might solve some of the problems of not having multiple scoreboards, because you could get an annual reward in this way. People might not like this idea, but you could possibly charge a nominal entry fee (say $5) to enter. That would ensure that the players are dedicated, and could give the site some increased money....or it could be a way to give out cash prizes. Of course, then people would consider it to be betting, and it would probably be illegal outright.
Anyway, that is my thought on the matter. Whatever form it may come in, I would love some CC sanctioned tournaments.