I am trying to do something like this as well. Maybe we could work together on a plugin to do this.
I have downloaded and installed Role Manager. From there I was able to create roles for the hierchy I described. Now to figure out how to limit a user to a category or sub-cat. From there I will need to figure out the email notifications.
If anyone would like the url of my page, I will post it. I didn’t want to post ‘google juice’.
