Just a little opinion to keep it to 32 people. Make it even so that way there are no byes or anything. That or something like that. Can be circumvented by my suggestion below.
I really like the word count idea, as that should force the people to post a lot faster. And the battles could actually take only a week too. Provided judges knew ahead of time, or it gets works out, you could have 2-3 members "Guest Judge" in order to make the threads go more quickly.
Also, another way to get around even the judging thing, is to just have 3-5 rounds of matches, with all different types of arenas, all with a 200 word limit per post. The total score would be tallied and the highest would be winner. So someone who lost every match, but scores 70s the whole time might still win, and there is no true elimination. So it's not so much who cowboys up for the right matches but who is consistently the best writer.
Also, in order to keep it more interesting, we could always have a side betting pool. Entrants can put their weapons up to the game of specific matches against their opponent. So Slayer could bet his buster sword against Max Dirk's gun. Not an official thing, but as an optional side thing to help make matches better.