It's a fantastic idea... I know that there was a Mos Eisley diorama made before at a Celebration... or at least I think so.
So, in my mind it would be really cool to create something that is not from Tatooine, but instead a Coruscant diorama. Of course Tatooine is always going to be about the most recognizeable area in Star Wars, and you can make a joint Mos Eisley/Mos Espa area, along with even Jabba's Palace, so maybe that is the way to go. You could even have a little moisture farm or two out in the corner of it.
This is a big project and it will take a group effort for it to work, but I think there needs to be a clear leader/captain of this project to ensure it goes according to plan - I would suggest something living in the Los Angeles area as that would be most convenient. After all, you don't want 10 chiefs and only one Indian.
I am pretty sure this is something I won't even be able to attend, but I'd be happy to donate some figures to it and run some updates on the front page at www.yakface.com
We could maybe even make some sort of t-shirts for everyone who participates.
What gets done with the figures afterwards?