As for competitions - I think it would actually do more good, instead of launching our own, to encourage people to take part in other events. For example, there's yet another Ludum Dare this weekend - go and join! Maybe if your game is awesome enough, some people will actually grow curious as to how were you able to implement it in Pascal.
Unfortunately I can't participate this time, since I have classes at my weekend uni.

Either way, if organising game competitions, I think one week is best - longer than a single weekend, so you don't have to rush, yet short enough not to discourage with a vision of having to write a lot of code because people will expect a large game.
I also think it could be interesting to have a non-gamedev contest - say, implement an algorithm, or maybe create some kind of game AI in .dll/.so which will then compete against each other. code_glitches ideas also seem interesting.

As for a community project, I don't know how my experience will look compared to others, but it's sure worth a try. Could be a good opportunity to learn something new.