Jim,
Let me preface this post, by admitting that I did not read this entire thread.
I have an idea for your show:
Do you recall when Texas Hold'em first gained popularity on television? The prize pool that was televised, was not the value of the actual prize pool. To build interest in the show, the producers used deception, and showed inflated figures. This led everyone to believe that they could make a million dollars, playing poker. It certainly didn't take long for Texas Hold'em to take off.
Maybe you could do the same thing... The players pay their entry, and play the tournament, as you have described. Though, you make it seem as though they are playing for very high stakes. And, you make it seem as though these tournaments are common, as if it would be easy to make a fortune.
I believe this could work. Look at what made The Color of Money such a hit. It was the idea that money could be made easily, playing this game. That movie was pure fantasy, but it had a huge impact on the game. You could make this reality show, with only a portion of it fantasy, and potentially have the same impact.