Let’s look at this from a historical perspective. The XC race at Unicon XIV was a starting area disaster. Basically you had to be lucky to have had a chance in that race. You absolutely had to be an excellent sprinter, probably near the middle of the starting area, and with no sloppy riders around you. Rules were drafted to help avoid that situation, and many improvements were made. The Unicon XV race was broken into groups to avoid the problems of Unicon XIV.
This is the best way to work a head-to-head race, but is limited by number of participants. Even with a big field like we had in Wellington, 100 riders would have made it too messy for the first lap, especially in the singletrack sections. Though I believe there’s a time when being stuck behind someone on singletrack is just a part of the race, this only holds true when it’s broken up by places were passing can occur.
So that first option should work in most cases, except at the very big events (like Unicon). But with 100+ riders, even doing 1 km of dirt road would favor the sprinters, leaving the slower riders, who might be much better climbersand more fit, struggling to pass 50 riders with too much of a crowd for it to be considered “even”.
This works as long as the self-elected fasties don’t exceed the space in the firsts starting group. Nobody knows who’s the fastest. Can’t even compare to last year, when one guy may have been at peak fitness, while this year he didn’t train and someone else is maximally fit. Most riders know roughly where they fit in, but that leaves many that have no idea.
This carries the disadvantage you mentioned, plus it makes for a much less interesting spectator event, and less fun for the top riders.
But then it’s not a mass-start race, it’s a Time Trial. That doesn’t solve the problem you’re having in your rant. And you would still have to pass lots of slower riders if the starts are random.
You forgot this one:
5) Preliminary race. It doesn’t have to be as long, but needs to be long enough for riders to demonstrate superior fitness level beyond sprinting. Should be a sample of what’s found on the main race course. For the Unicon XV course, a simple one would be to do one lap. Can be held days before, or hours before, so riders aren’t all tuckered out. Could even be done in the form of a workshop, as part of a MUni outing, if a few officials are present to maintain order and record the results. Top riders from the qualifying race go in Group 1. If there are riders who can’t make it to a much-earlier preliminary race, or have conflicts with other competition events, they can request Group 1 based on space. People who were slow in the preliminary race don’t need to be in Group 1.
It’s more complicated, but it’s the only way I can think of to get all the actual fastest riders into one group.
Good luck with that. I will point out that the race in question is now in the past, and cannot be changed. All that can be changed is the future, so for best results work on future changes. 
