"Steps."
As for my ideas eejit, it would be to base it more on a SNG that plays like a cash game, instead of a cash game that plays like a SNG. In other words, it would BE a SNG with a buy in, but in ADDITION, players would be playing with actual cash (the cash amounts should be less than the buy ins). If they bust, they would be allowed to reload as per your rules (maybe a max of 3 times though, so the game wouldn't go on forever), and they could buy in for whatever amount they wantin between whatever min and max are defined (you'd need a reasonably tight range too, like $25-$100 on a $100 buy in, because if someone sat with $10,000, it would be nearly impossible for them to lose). Then play "normally," with increasing (cash) blinds. People are free to get up whenever they want, but as soon as they do, they are out and not eligible for the prize pool (unless they finish in the top 3).
HeEre comes the interesting part.... Instead of playing down to 1 player, you could keep a full table going by allowing more people to buy in to the empty seats. What you'd need to do though is keep track of who came in when to determine who is eligible for what part of the rolling prizepool. That may not make sense, but it does in my brain.
Lots of details would need to be worked out, but it has potential. It's a lot different than what you are posing though, and I think I like your idea better, at least as far as what it's trying to accomplish.
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