You could think about handicapping the tournament.
Rank players based on skill (say 1-5, with 5 being best). Higher ranked players would have to win more game vs. a lower ranked player to advance based on each player's ranking.
In other words, if 2 players were matched together, and one was elite (ranked a 5), and the other was good (ranked a 2), the elite player would have to win 5 games to advance, vs. the good player having to win 2 games to advance.
Not perfect, but certainly gives the lower ranked player more of a chance. A system similar to this is used in billiard tournaments.
This is a brilliant idea.