I totally agree with everything you said, the work and time definitely takes its toll hehe. I mean there is alot more to think about when building a project such as a complex open source game, like a website which a nice one takes some time, the integrity of the group. I believe that even if you only have 2-3 hours a day or a little less to do some work, I still think you can still deal with the community on the side. However, that also depends on how many guys are working on the thing.
I think the thing that will help make open source games really come to life is for that one project to come along that really just redefines how its done. We've got some really really good projects out there already that in time could do it themselves, like Battle of Wesnoth. I think thats probably the most complete open source game yet. Its even got single player which is pretty impressive. Single player seems to me like something that would be difficult to pull off in a open source model, but they made it modular (aka the campaign system).
So I think if you were to take a FPS, for instance, it would have to be done the episode route like Duke Nukem 3d, or Quake. And have it ready for community made episodes that can easily integrate into the game. In a Diablo styled game in a Quake 3 engine, well, my only concern would be the size of the levels and load times. Because the levels will all have to be decently sized, meaning no loading every 2 seconds.
So the server would have to basically load a ton of maps right from the start and somehow, allow the players to be in different maps at the same time on the same server. I think the best way to do the levels would probably be just do them the Diablo 1 route, each level of a dungeon is a separate level. The nice thing is, since the game would be top down, it would allow you to use less detail on the level, and be able to cut things out that are not visible, like the sky or ceiling.
You could have a camera that spins in a 360 degree angle but then you'd have to use more detail. Which would slow things down on older systems and would require more work. So in my opinion, a locked camera top down would probably be the best route.
As far as 3d modeling, well, whoever would be doing that would have their hands full haha. All those separate items that would attach to the body of the character, all those unique ones, all the decorations and the hardest part, the player and monster models. That would definitely be the hardest part of the development. Granted the level designer could take care of alot of the decorations.
With level designing, I would make sure GTK Radiant is the only editor used. Since itself is open source and is in my opinion the way to level design on any Quake engine. Unfortunately, alot of people like Quark, I hate it. Open Arena level designers use Quark. The problem with Quark is that when you save a map with Quark, it breaks compatibility with GTK Radiant and you can never open the maps in Radiant after that, and Quark is Windows only. Which causes in my opinion, a huge problem.