I think a lot of these problems will arise down to the "get your friends to vote" bit - I know that some of my workmates doled out 1's to people that definitely did not deserve them - the general public will always behave this way when they see the issue as one of loyalty. I know that a few of my friends who are into recording themselves joined up and voted, but not as many as those who have no idea/interest about recording.
The truth is, voting up a track based on this loyalty is just a bad as voting down the others.
It's a pain in the butt, but I think it's something that's always going to play on you, i.e. the more members you have, the more clout your forum will achieve (and it definitely deserves MAXIMUM influence).
So, maybe another idea would be to only allow voting to members who have been here over a certain period of time (once again, though, I'm sure that this would take a bit of investment to create another level of member).
I think that the whole competition thing is one of them things that you can keep looking at until it drove you insane if you're not careful
A lot of the form that the contests can take will be down to the available prizes, I suppose. You could run sections that split amateurs from pro studios etc. until your blue in the face if you have the available prizes!
It does seem shameful that no song was left with a score that was graded above even average! For my part, I know that at least a couple of my friends behaved with misplaced loyalty... after the fact it is too late, I know, but I tried to counter that by asking others after them to just vote for my song.
I also think, to anyone that's not into recording, the term 'song' becomes a factor (after speaking to some of my friends - they viewed the soundtrack type stuff as 'not songs'). I'm not sure what could best be done about this - I guess the time period thing would, again, counteract this to some degree.