Could still work if one assumes that the Curse of Karazhan still remains despite Malchezzar being defeated, only allowing in 10 people at a time. The rest of the participants would have to stay outside, but the grounds around Karazhan is plenty spooky on its own.
Heck we could even have people hiding themselves in or around KZ when its not cleared (by avoiding what groups can be avoided). They couldve been kidnapped by one of the beasties inside. Searching Deadwhisper Gorge for lost/kidnapped people could be quite awesome in its own way.
EDIT: Could have people playing "villains" (possessed or otherwise coerced to act against their guildmates)