Wish I had a solution.
Personally, I don't think a solution is all that hard, it just requires a little press advocacy and some determination by a small handful of folks. I also think that the ball has started rolling in that direction, thanks to windpath's efforts to date, and if momentum can be kept up and others pitch in to help out, it should be fine. To that end, here's what my solution suggestion would be:1) Get the project away from reliance on forrestv, which is already happening. Again, nothing personal, but if he's not committed with or without donations, having it rest with one single person is detrimental, and as we have seen stunts growth horribly.
2) Re-work the p2pool project pages, sites, and get the important info updated - how to get it, how to set it up, where to go for answers, list of nodes and peers - need to be cleaned up and _maintained_ so that it's relevant. This at least in part is happening, a-la windpath.
3) The hardest and probably most controversial - change the mindset of the pool from "open, 0%" to "proprietor-owned (note I didn't say proprietary, slight but important semantic difference) with minimal fee (1-1.5%)".
#3 I think is the answer to address the major problems facing the pool. Open source and free will only take any project to a certain level, as long as people are willing to donate to foster a better cause. I don't think this works in the BTC world, since we're all doing this for one reason - to mine BTC and make money, not to cure cancer or find alien life.
What's the biggest difference between proprietary pools and p2pool? Proprietary pools have an entity (person, business, etc) behind them driving their pool to be better, because it attracts new miners and ultimately helps their bottom line. That's the fundamental "problem" with p2pool - the ideology is great, but call a spade a spade in this case and admit the reality that without reward, you're not going to get a lot of people to do things to help beyond some forum posts.
I would suggest the only way to have this work is treat it like a true O.S. project - form a core group of members as caretakers of p2pool (you can easily see who could be a candidate by their actions). Then change the code to remove the .5% donation to forrestv and replace with a 1% donation to an escrowed account overseen by the core group. From this 1% amount, you could do 3 things that could ensure the ongoing health of p2pool - 1) form bounties for developers to tackle the coding of fixes big and small, 2) reward public pool node/peer operators for providing their time, services and resources maintaining high quality nodes that all miners can use and finally 3) re-distribute the leftover percentage directly to all the miners using the built-in reward/tip system already existing in p2pool. This will provide a mechanism for properly funded development, and rewards to all who are doing their part to use p2pool and help it grow and flourish.
can someone explain how situation 1 above works??? how did the system determins the average works needed to generate 3 blocks??? actual or predicted??? 
