I've been trying to get my league onto this idea for some time, using our bag tag numbers for seeding, but it didn't go far past the idea stage.
A big drawback is that half the players play 6 holes, and are eliminated.
That was one of the drawbacks. The idea I had for getting around it was to play the eight players top to bottom, and for each 6 hole match to have a payout for the winner, no matter what bracket they were in.
So each entrant buys in for $3, and has 3 matches at $1 a match.
First round:
Match A1: Seed 1 vs. Seed 8
Match A2: Seed 4 vs. Seed 5
Match B1: Seed 2 vs. Seed 7
Match B2: Seed 3 vs. Seed 6
Second round:
Match AW: Match A1 and A2 winners
Match BW: Match B1 and B2 winners
Match AL: Match A1 and A2 losers
Match BL: Match B1 and B2 losers
Final round:
Championship: Match AW and BW winners
Consolation: Match AW and BW losers
5th Place: Match AL and BL winners
Cellar Match: Match AL and BL losers
Winner of each match, each round gets $2. If a match ends in a tie, they each get their $1 back, but it being a bracket tourney, there has to be a tiebreaker (at least in the first two rounds) to see who advances. You could use a CTP, last person to have the lead rule, or bag tag number to do this.
One problem with this system is that in an eight player bracket tournament, 5th place wins twice, and 4th place loses twice, so 5th ends up with more money. Perhaps the way around that is to add an extra $1 to the entry, and pay out an even $2 to the top half. So your final payouts would look like this...
1st place: W+W+W+top4=$8
2nd place: W+W+L+top4=$6
3rd place: W+L+W+top4=$6
4th place: W+L+L+top4=$4
5th place: L+W+W=$4
6th place: L+W+L=$2
7th place: L+L+W=$2
8th place: L+L+L=$0
That of course is assuming no ties. That's also a lot of $1 bills.