Ryan,
I believe this system will take care of the Champ and Runnerup situation. We would still use the same formula that the State has. We are only seeding the Champions from each regional and them placing their entire Regional into the formula by their respective A,B,C,D region. This way your champion and runnerup would be on the opposite of the bracket as they are now.
Again, in most cases, the States formula works very well. Occasionally, we have the two Champions or Outstanding wrestlers on the same side and that is when a simple realignment of an "A" Regional for a "C" Regional placement would take care of the seeding. The A and C were used as examples and could be any combination.
Remember the goal! Seperate the two best athletes and give them a chance to meet in the finals. It will build a little more excitement and help us showcase our best athletes.
I did this to last years 4A and I think it only involve changeing 2 or 3 brackets from the state formula. I agree, this is still not perfect but we need to start somewhere and keep improving on it and this is a pretty simple solution which is not going to cost the state extra $$$ and would only delay the brackets until maybe Sunday afternoon instead of midnight.