For the arena, a force field could do the job fairly well, it would be a nice even space. Also, with red power 2 there are igniters that could start a forest fire, also a lava fabricator might be able to create the lava flow. A redpower pump could flood an area, it wont be super fast though... Wireless receivers and transmitters could make it so you could control them without a ton of redstone. Would there be any building in the map, and hidden chests where people could get weapons and armor? For the no breaking blocks someone the controller could claim the land. Dynamite would be cool, turn a corner, next thing you know someone is setting off some dynamite right where you are. Also, where would everyone go when they died? We could make a little glass room with beds, that way we go there when we die, but still see the battle going on. This would be really cool, I hope we're able to do it. I'll look into other mods to see if we could use anything else over the weekend.