That is a very nice idea!
I won't contribute a level but some money (50€ or so) to the prize pool!

I think the scale is too small, I find it easier to create levels (/details) and especially texture the level (the common 256x256 texture size is 2 medium cubes high, no scaling necessary) for first person view games when the player is 1,5 medium cubes high. But you decide.

A reference-model would be good.